Market rotations happen all of the time. There are rotation strategies that can move with the market and help investors maximize gains over time.
In the upcoming webcast, Take Advantage of Market Rotation by Using a High Beta and Low Volatility Rotation Strategy, Matt Digges, divisional manager at Pacer ETFs; and John Lunt, president of Lunt Capital Management, will outline a dynamic factor-based investment strategy that alternates between S&P 500 investment factors in response to market changes.
Specifically, the Pacer Lunt Large Cap Alternator ETF (ALTL) is an index-based ETF that aims to rotate between high-beta and low-volatility stocks listed in the S&P 500 Index.
The high beta index is an index comprised of stocks that are most sensitive to changes in market returns.
The low volatility index is an index comprised of stocks that exhibit lower price volatility than the overall market average.
“Both low volatility and high beta factors have historically exhibited periods of outperformance. The Lunt Capital U.S. Large Cap Equity Rotation Index is innovative because it uses a rules-based strategy to alternate between the high beta and low volatility factors,” according to Pacer ETFs.
Additionally, the Pacer Lunt Large Cap Multi-Factor Alternator ETF (PALC) and the Pacer Lunt MidCap Multi-Factor Alternator ETF (PAMC) are passively managed funds that rotate amongst value, quality, volatility, and momentum stocks within the S&P 500 Index and S&P MidCap 400 Index, respectively.
A factor is an attribute that can help explain the long-term risks and returns of an asset. Factors can be divided into both high and low factors. Momentum describes the tendency of high-performing stocks to continue performing well in the near future. Quality covers the characteristics that contribute to a company’s durable business model and sustainable competitive advantage. Value is a measurement of a stock’s market value relative to its intrinsic value. Lastly, volatility covers the measurement of variance of returns for a security or index.
Financial advisors who are interested in learning more about a market rotation strategy can register for the Wednesday, September 14 webcast here.