iQ Canada Sensitive Super Sector Model
INVESTMENT OBJECTIVE
The iQ Canada Sensitive Super Sector Model seeks to generate long-term returns in excess of the total return of the S&P / TSX Index with less down-market risk by selecting stocks of companies from sectors whose betas are close to 1.
SENSITIVE SUPER SECTOR - DEFINED
The Sensitive Super Sector is comprised of industries that ebb and flow with the overall economy, but not severely so. Sensitive industries fall between the defensive and cyclical industries as they are not immune to a poor economy, but they also may not be as severely impacted by a poor economy as industries in the Cyclical Super Sector. In general, the stocks in these industries have betas that are close to 1.
Sensitive Super Sector includes the following Sectors:
Communication Services
Energy
Industrials
Technology
PROCESS
The iQ Canada Sensitive Super Sector Model represents an equal-weighted portfolio of ten Canadian that are selected by applying two proprietary investment strategies to a database of all Canadian-traded common stocks from the Telecom, Energy, Industrials and Technology sectors.
The Model takes the two lists selected by each strategy and assigns each security a score based on its position in the list. The Model then selects the top ten stocks based on their highest overall score, favoring those that were chosen by both of the following strategies:
First Strategy
We begin with all common stocks of Telecom, Energy, Industrials, and Technology sectors listed on a Canadian securities exchange as identified by Standard & Poors.
We rank these securities by market capitalization and keep the top thirty.
Of the thirty remaining securities, we rank by 5-year Beta and select the bottom 10.
Second Strategy
We begin with all common stocks of Telecom, Energy, Industrials, and Technology sectors listed on a Canadian securities exchange as identified by Standard & Poors.
We rank these securities by market capitalization and keep the top thirty.
Of the remaining thirty securities, we rank by 26-month relative strength index (RSI) keep the top ten.
This model reconstitutes every February, May, August and November