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Asset Class Rotation Strategy

The goal of the Asset Class Rotation Strategy is to optimize performance by changing asset classes, and hopefully, over time be able to exceed the performance of the S&P 500 index.

This is done with active management by rotating in and out of sectors, broad indexes, government bonds and US Government money market funds.  The strategy seeks the mutual fund an asset class which has historically risen during similar market conditions.  The strategy is designed for each index to be used during periods of lower risk for that particular index – which we believe allows us to capitalize on the opportunity for gains.

When risk increases for a given index, we rotate out of that index and move to another, potentially more optimal index, and apply the same criteria in the next selection. If no index is able to meet the short-term criteria, the strategy uses money market funds as the safest alternative to minimize risk, until the selection criteria are met again. The strategy is constructed such that it operates as described during all market conditions. This technology, which is driven by a computerized, formula-driven, mechanical model, allows us to be guided without any emotional component.

An investor who is risk averse, but who wants market exposure on a more selective and targeted basis with stock funds and bond funds might want to consider using this strategy. Investors in this strategy should have a time horizon of at least 3 years. All investments carry some degree of risk. Clients using this strategy might lose some, or all, of their investment principal.

This strategy considers the use of stock and bond market indexes when it gets the signal to enter the market and goes to cash when it gets the signal to exit the market. This strategy uses Guggenheim mutual funds, which have no “front-end” or “back-end” load sales charges, no transaction fees and no short term redemption fees. The strategy does not use individual stocks or bonds, bond funds, leverage or shorting.

*Performance reflected above is net of the highest fee (1.5%) and includes the reinvestment of interest and dividends. Please refer to the footnotes and disclosures at the end of this page for additional important information about this graph.

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