The Guardian Sector model is an active strategy investing into U.S. equity sectors based upon a blend of cyclical trends, relative strength and valuation. The goal is to gain alpha for portfolios by capitalizing on the differing phases of the economic cycle.
What are Sectors?
All major public companies belong to one of 11 sectors based upon a classification system developed by MSCI and Standard & Poor’s. Companies within the same sector tend to have higher correlations in their price performance and rate of revenue and earnings growth than companies from different sectors. The unique characteristics of each sector and their tendencies to perform in a different way at various points in the economic cycle offer an excellent means to capitalize on the business cycle.
The following chart displays the varying performance of the 11 sectors within the S&P 500 Index over the last 13 years:
The chart above shows the historical annual total return performance, including reinvestment of all capital gains and dividends, of the 11 sectors represented within the S&P 500 Index. It is meant to show changes in market trends across the different S&P 500 sectors over the 13-year period, 2007-2019. You cannot invest directly in an index, as the returns do not include fees and expenses. Past performance is no indication of future returns and you can lose money by investing into equity sectors. Data provided by Novelinvestor.com.