Kingsview Investment Strategies: Sector Alpha Portfolio · 2020. 4. 16. · select sctr spdr fd cons discr xly spdr s&p retail xrt spdr ser tr s&p homebuilders xhb ishares dj us home

Kingsview Investment Strategies:

Sector Alpha Portfolio

Kingsview Investment Strategies:

Sector Alpha PortfolioThe Kingsview Sector Alpha Portfolio centers on the basis of sector specific investing according to macroeconomic indicators while employing a momentum overlay. In composition, portfolio strives to identify the current economic cycle of 10 specific sectors (and their various subsectors) in the S&P 500, and invest according to those trends. The analysis is performed with the goal to pick the best areas of the equity market and avoid the worst ones; thus outperforming with less risk on the upside when equity market action is positive and providing potential downside protection when equity market action is poor. Upon initial positioning, the portfolio will be equal weighted amongst the sector specific ETFs that are chosen for investment. There will be a moderate rebalancing threshold, should the portfolio veer out of balance. The specific allocation sector set is determined by the major phase of the economic cycle of expansion and contraction and the resulting market conditions of the sectors therein. Those cycles are further delineated below:

Expansion Contraction

Marked by ascending employment growth, positive GDP growth, and strong money flows into equities, an expanding economy is also signified by rising productivity and output, as well as rising consumer confidence and spending. Essentially, more people working, making more goods and services available for purchase leads to an expansion and higher stock prices. This phase can be sometimes consistent with overbought conditions in the markets, rampant speculation, and, in some cases, an overheating economy. While productivity and output remain strong during this cycle, the growth rate of each becomes inconsistent and eventually declines. Consumer confidence and expectations tend to reach a high at these levels and stock prices can become very volatile.

Contractions are marked by noticeable weakness in economic data, where such declines gain momentum. Some clear signs are decreasing employment, decreasing productivity, and weakening consumer demand. Money flows out of equities and favors fixed income investments and money markets. Essentially, fewer people working, making fewer goods and services available for purchase leads to a contraction and lower equity prices. This phase can also see output and employment hovering near their lowest points, while productivity and consumer spending likely hit new lows over this period. Money flows towards equities fall to their lowest levels, while money market and fixed income investments hit new allocation highs. Stock market volatility tends to increase as the market searches for appropriate price levels.

Eligible Sector Allocations & Corresponding Investment Representations

SECTOR NAME SYMBOL

SELECT SCTR SPDR FD CONS DISCR xly

SPDR S&P RETAIL xrt

SPDR SER TR S&P HOMEBUILDERS xhb

ISHARES DJ US HOME CONSTRUC itb

SPDR FD CONSUMER STAPLES xlp

POWERSHARES DYN FOOD & BEVERAGE pbj

POWERSHARES DYN MEDIA PORT pbs

POWERSHARES DYN LEI & ENTMT pej

SPDR FD ENERGY xle

SPDR SER TR S&P OIL & GAS EXP & PROD xop

SPDR SER TR S&P OIL & GAS EQUIP SVC xes

SPDR FD FINANCIAL xlf

SPDR S&P BANK ETF kbe

SPDR S&P REGIONAL BANKING ETF kre

SPDR S&P INSURANCE ETF kie

PWRSH KBW PPTY &CAUSLTY INS PTF kbwp

ISHARES DJ US BROKER INDX iai

ISHARES FINANCIAL SERVICES ETF iyg

SPDR FD HLTHCARE SELECT xlv

SPDR SER TR S&P BIOTECH xbi

SPDR SER TR S&P PHARMACEUTICAL xph

SPDR S&P HEALTH CARE EQUIPMENT ETF ihi

SPDR S&P HEALTH CARE SERVICES ETF xhs

SPDR FD INDUSTRIAL xli

SPDR S&P TRANSPORTATION ETF xtn

SPDR S&P AEROSPACE & DEFENSE ETF xar

SPDR FD MATERIALS SELECT SECT xlb

SPDR SER TR S&P METALS & MINING xme

SPDR FD TECHNOLOGY xlk

SPDR SER TR S&P SEMICONDUCTOR xsd

SPDR S&P SOFTWARE & SERVICES ETF xsw

ISHARES S&P GSTI NETWRK INDX ign

SPDR FD UTILITIES xlu

SPDR S&P TELECOM iyz

Kingsview Asset Management (“KAM”) is a registered investment advisor. Information presented is for educational purposes only and does not intend

to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and

unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial advisor and/or tax professional before implementing any

strategy discussed herein. Past performance is not indicative of future performance.

Kingsview Investment Strategies (“KIS”) is the internal portfolio management group of KAM. KIS asset management services are offered to KAM

clients through KAM IARs. KIS asset management services are also offered to non KAM clients and unaffiliated advisors through model leases, solicitor

agreements and model trading agreements. KAM clients utilizing asset management services provided by KIS will incur charges in addition to the KAM

advisory fee.