global rotation etf portfolio

OBJECTIVE: capitalize up-trending market segments, globally

Overview - The Turner Capital Investments Global Rotation ETF portfolio is designed to put capital to work in up-trending market segments, world-wide, through the universe of both global and domestic ETFs (Exchange-Traded Funds).

The primary assumption is, in most cases, capital shifts or rotates from one market segment to another as markets move into and out of various bull and bear cycles, whether those cycles be broad-based or highly localized. 

The universe of ETFs for this strategy cover the following:

  • US Large-Cap
  • US Mid-Cap
  • US Small-Cap
  • China
  • Hong-Kong
  • Japan
  • Europe
  • UK
  • Emerging Markets
  • Large-Cap Global (Non-US)
  • Mid-Cap Global (Non-US)
  • Small-Cap Global (Non-US)
  • Gold, Silver, Oil, Nat Gas
  • Shipping
  • Currencies
  • Bonds
  • Major Market Sectors
  • Major Market Industries
  • Major Index Inverse ETFs

From these (and other) types of ETFs, client capital is invested into ETFs that are strongly trending higher.  Most ETFs in the strategy's ETF universe trade well over 1 million shares per day, thus maintaining sufficient liquidity for trading in and out of the ETFs.

Management Approach - The Global Rotation ETF strategy is designed to follow the trend of capital as it rotates out of one market segment into another.  Each ETF is treated as its own 'market', where a 200-day moving average of each ETF is watched to see if the ETF is gaining or losing strength.  The objective is to remain fully invested all the time, regardless of the overall market conditions or trends.  Specifically, the process works as follows:

  • When an ETF's current price is above its 200-day moving average plus one standard deviation of normal volatility and trending higher, the objective is to buy and hold the ETF while maintaining a volatility-based, down-side exit price ("stop") on each ETF. 
  • As an ETF holding stops out, capital will move to another ETF that is trending higher.
  • If the market becomes so bearish that only the inverse ETFs are trending higher, the number of inverse ETFs in client portfolios will increase.  If the client portfolio is only holding inverse ETFs, the number of holdings may be far less than 20 and, as such, more capital may be allocated to each of the inverse ETFs in order to keep the client portfolio fully invested.

Holdings Profile - This strategy focuses on up-trending ETFs with a minimum of 1 million shares traded daily.  While holding cash is not a specific strategy per se, there may be times when risk is high enough, in the manager's opinion, to hold cash as a means of mitigating downside risk.

Portfolio Structure - When fully invested, client portfolios following this strategy will generally hold up to 20 different ETF.

Minimum Account Size - $50,000

Fee and Fee Structure - With a few exceptions (see Management Fee Exceptions, below), Clients pay an "all inclusive" management fee to Turner Capital Investments, LLC (TCI).  This management fee covers all management services and trade commission fees.  This means TCI clients do not pay a commission to the broker for trades made in their portfolio(s).  TCI management fees range from 3% to 1% of the month-ending net asset value of client account(s).  The percentage rate is based, in part, on the aggregated total of an individual client's accounts being managed by TCI (see "Family Discount", below).  One-twelfth of the fee is deducted from the client's account(s) monthly.  Clients have the option to pay management fees outside their account(s) rather than have the fee automatically deducted from their account(s). 

Family Discount - When calculating the management fee percentage, TCI aggregates all client accounts including client's family accounts, such that the aggregate amount of the client plus family accounts are used to get the lowest possible management fee.

Management Fee Exceptions - In those cases where either governmental rules or broker-dealer rules prohibit TCI from paying for trade commissions for the client, the management fee will be reduced by 10 basis points.  For example, a 3% rate will be reduced to 2.9% and a 1% rate will be reduced to 0.9%.

Cash Strategy for Client AccountsWhen client accounts are not fully invested in individual ETFs, the balance is typically held in cash or cash equivalents.  It is the goal of the Manager to keep client accounts fully invested, but depending on market conditions and risk assessment, the Manager may choose to have client accounts in cash.