The Leveraged Index model is based on using a rules-based, quantitative analysis investment strategy that is highly opportunistic and focusing on 2x Ultra ETFs, along with high momentum upward trending stocks. IMPORTANT: See Note, below, on Leveraged ETFs**.
THE LEVERAGED INDEX STRATEGY OVERVIEW
Leveraged Index OVERVIEW
50/50 split of capital in SSO and QLD in bull markets
50/50 split of capital in SDS and QID in bear markets
One or more high momentum stocks
The Leveraged Index model is based on using a rules-based, quantitative analysis investment strategy that is highly opportunistic and focusing on 2x Ultra ETFs, along with high momentum upward trending stocks.
Minimum Account Size:$100k
Moving from left to right and as shown in the chart above, the market is considered “bearish” when the market is trending lower between a red symbol and a green symbol. The market is considered “bullish” when the market is trending higher between a green symbol and a red symbol.
Standard Turner Capital rules for overbought, oversold and potential changes in trend (orange diamonds on the chart above) are applied as needed by the portfolio manager.
In all cases, stop loss settings are used and adjusted as needed by the portfolio manager. However, the manager my choose to exit a trade before a stop loss is triggered.
PERFORMANCE - Turner Capital publishes the historical performance of this strategy each week in the Turner Capital "Client Letter". To get a copy of this letter, please fill out the "Free Newsletter" form. IMPORTANT: Past performance provides no guarantee, implied or otherwise, of future returns.
BULL, TRANSITION OR BEAR MARKET CONDITION - The Turner Total Market Index (TMI), in general, is rated by the Turner Capital software system as either in a bullish, transition or bearish trend. A bullish market trend exists when the 200-day moving average of the TMI has a positive slope. A bearish condition exists when the 200-day moving average of the TMI has a negative slope. The market is considered to be "in transition" when the 200-day moving average of the TMI is flat.
OVERBOUGHT/OVERSOLD WARNING - The financial objective of Turner Capital's market-directional investing is to keep client capital invested in equities when the risk is lower, relative to normal markets, and to capture profits when risk becomes overly elevated. Once such example of overly elevated risk is when the market becomes "overbought" or "oversold". It is at such times that management looks for opportunities to take profits and move some or all of a client's portfolio to cash. Overbought conditions can occur when the Turner Total Market Index (TMI) is excessively above 200-day moving average of the Index, or excessively low below the 200-day moving average of the Index.
DOWNSIDE EXIT - According to the Turner Capital analytics, equities held in a client portfolio will typically fluctuate within mathematically measured volatility ranges. We set stops on each holding just below these volatility ranges. If a holding's intra-day price drops below its normal volatility range, we consider the holding has moved from normal volatility to a change in trend, at which time the holding is sold.
Moving Into the Market - When the slope of the Turner Total Market Index is either in a bullish trend or a bearish trend, the manager of this portfolio model has the discretion to put up to 100% of capital to work; bull-biased investments in bull-trending markets and bear-biased investments in bear-trending markets.
Leveraged Index Model Holdings Profile - The ULTRA-MAX strategy holdings are comprised of a 50/50 mix of the SSO and QLD in bullish markets; and a 50/50 mix of SDS and QID in bearish markets, along with up to 20% or more of net asset value (NAV) invested in stocks that are trending sharply higher with strong indications of upside momentum.
No options are used in the investment strategy.
This model focuses on up-trending stocks of US companies with market caps of $2 billion or higher, as the primary target holding in bull-market cycles. In bear-market cycles, the focus is to hold 100% or more of the portfolio in 1x inverse ETFs. In all cases, the manager's discretion applies.
Minimum Account Size - $100,000
Fee and Fee Structure - Clients pay a management fee to Turner Capital Investments, LLC. This management fee covers all management services. There are no trade transaction fees. 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.
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.
Potential Draw-Down - Generally, draw-downs are limited to losses incurred when a stop loss is triggered. The amount of actual loss (peak-to-trough) depends on when the client began following this strategy and the high in his/her account during that time. The average stop loss for holdings in this strategy can run from 10% to over 20%. Draw-downs, historically have been in the 15% to 22% range. A draw-down estimate should not be considered the maximum potential loss of capital. A draw-down can occur at any time; and then, at any point in the future, another draw-down can occur. Turner Capital does not warrant or promise or guarantee any maximum potential loss in this or any investment strategy that we manage.
** It is important to keep in mind that leveraged ETFs and leveraged inverse ETFs are complex, carry substantial risks and are intended for short-term trading. Most reset daily and seek to achieve their objectives on a daily basis, but there is no guarantee that the stated objectives will be met on any given day. Due to compounding, performance over longer periods can differ significantly from the performance of the underlying index. Leveraged ETFs and leveraged inverse ETFs may be more costly and less tax-efficient than traditional ETFs.