ETF GLOBAL ROTATION STRATEGY
OBJECTIVE: Outperform the S&P 500 index in bull, neutral and bear market cycles through investments in globally focused Exchange Traded Funds (ETFs).
Management Approach - Focus on ETFs that represent all major economic centers of the world, along with highly capitalized commodity ETFs, the approach for this model is to be long and fully invested in the global market at all times. The manager has the discretion to move into inverse ETFs if the market supports a shorting solution in bear markets.
Portfolio Model At-a-Glance
- Maximum of 20 ETFs
Remains fully invested in most markets
May hold inverse ETFs if warranted by market conditions
Turner Capital has developed a set of proprietary analysis algorithms that provide the portfolio manager with the following information:
TREND AND CONTINUITY OF TREND - The Turner Capital investment strategy is predicated on the assumption that ETF trends tend to stay on trend more than they change trend. Therefore, the methodology relies on the mathematical likelihood that a trend will remain reasonably constant until such time as the trend is detected as having reversed.
BULL, TRANSITION OR BEAR CONDITION - A major assumption made by this investment strategy is that not all global ETFs are correlated; meaning, there are some global ETFs in a bull, bear or transition trend at any given time. It is the job of the portfolio manager to find those global ETFs that are trending higher and keep client capital invested in those ETFs whenever possible.
DOWNSIDE EXIT - According to the Turner Capital analytics, ETFs held in a client portfolio will typically fluctuate within one standard deviation of normal volatility on a weekly basis. Once an ETF moves higher than one standard deviation of normal volatility above the ETF's Transition Zone, the ETF is typically held in the client's portfolio until such time as it moves down to or below the ETF's Neutral Zone; at which time it is sold. The assumption is, if an ETF drops into or below its Transition Zone, the risk has become too elevated to assume it will continue moving higher and its pricing trend has reversed from bullish to bearish in direction.
ETF Global Rotation Model Holdings Profile - This model focuses on up-trending US traded ETFs with a capitalization of at least $3 billion or higher and an average daily trading volume of at least 3 million shares. In all cases, the manager's discretion applies.
Minimum Account Size - $50,000
Fee and Fee Structure - With a few exceptions, Clients pay an "all inclusive" management fee to Turner Capital Investments, LLC. 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 1% to 2% of the 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 Aggregation for Fee Assessment - When calculating the net asset value of a client's account for the purpose of determining the appropriate management fee, TCI aggregates all the client's personal accounts, plus all of the client's family accounts, such that the aggregate amount of the client plus family accounts are used to get the lowest possible management fee for the client and the family accounts.
Cash Strategy for Client Accounts – When client accounts are not fully invested in individual equities, 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 or cash equivalents.