A Straightforward Approach
By looking at the business cycle of a sector, which reflects the position of the growth stage of that particular sector, we seek to estimate potential performance over the immediate term.
NAVFX uses proprietary mathematic calculations plus analysis of the macroeconomic environment to forecast sectors experiencing economic growth.
The Fund then uses that analysis to invest in exchange-traded funds (“ETFs”) focusing on specific sectors. By doing so, we eliminate the short-term market noise and volatility that other funds experience, such as funds that focus on specific investment styles such as value or growth, or small cap or large cap. The result is a long-term Fund that invests in assets that are geared toward generating excess returns, regardless of market cap or investment style.
Become an Investor
See the Fund’s recent prospectus and download the application to learn more.
Why Consider a Sector Rotation Strategy?
The GPS actively managed sector rotation strategy is an investment process that looks for key economic and business cycle signals to make moves in and out of the key business sectors. By tracking signals in both political and economic arenas, the GPS sector rotation strategy is designed to anticipate and take advantage of market trends by overweighting and underweighting key economic sectors. We look at each sector and based on current political and economic forces, determine the appropriate weight in each area.
For example, technology stocks outperformed during the late 1990s and early 2000s as new technologies associated with the internet fueled these companies. On the other hand, the financial sector and the housing sector both fell apart during the Great Recession of 2008-2009. Each of these sectors experienced their own business cycle, as the graph below shows:
The GPS Sector analysis encapsulates what each sector is going through, and forecasts what it’s expected return will look like going forward.
Tax Managed Trading
We take overall total return seriously and as a result, portfolio management focuses trading with taxes in mind. The Fund typically allocates assets in highly liquid sector-based ETFs, moving in and out of sectors when political and economic forces dictate. This can lead to a more tax managed trading model that many other actively managed funds.