iQ Canada ETF Sector Rotation Model

FOLLOW THE MOMENTUM...with sector ETFs!

Sector momentum is a sector rotation strategy aimed at boosting performance by ranking economic sector ETFs according to their momentum and buying the top performers and selling the laggards. iQUANT adds an additional layer of scrutiny by adding a technical indicator to the process.

Sector Rotation - with a hedge…

The iQ Canada ETF Sector Rotation Model selects the top 4 sectors from the following starting universe:

  1. iShares S&P/TSX Capped Energy Index ETF

  2. iShares S&P/TSX Capped Information Technology Index ETF

  3. iShares S&P/TSX Capped Financials Index ETF

  4. iShares S&P/TSX Capped REIT Index ETF

  5. iShares S&P/TSX Capped Materials Index ETF

  6. iShares S&P/TSX Capped Utilities Index ETF

  7. iShares S&P/TSX Capped Consumer Staples Index ETF

In addition, the Model may select a money market ETF if fewer than four sector ETFs qualify.

The Process:

  1. Start with seven Canadian sector market cap-weighted (“Capped”) ETFs.

  2. Kick out any constituent of the starting universe that is below its 6-month exponential moving average

  3. Rank by price momentum and select the top 4 ETFs

    1. If four ETFs do not make the cut, the remaining spots are filled by a money-market or an ETF money market equivalent (i.e. CA symbol “CMR”)

The Model reconstitutes every seasonal quarter (Feb, May, Aug, Nov).