Equity Rotation Strategy

Managed by Split Rock

-3.3% Last 30 days -5.1% Last 90 days - Last 365 days - Sharpe Ratio - Max Drawdown

Equity Rotation Strategy

Managed by Split Rock

-3.3% Last 30 days -5.1% Last 90 days - Last 365 days - Sharpe Ratio - Max Drawdown
Risk score
Strategy Stocks
AUM fee 1.0%
Requirements
• Investment minimum: $15,000
• Margin account
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Split Rock Private Trading and Wealth Management LLC (“Split Rock”) strategically manages its Equity Rotation SMA by continually monitoring which phase of the economic cycle we are currently in. Split Rock then invests in companies that it believes are best positioned within the current cycle. On an ongoing basis, Split Rock makes tactical adjustments based on geopolitical events and various micro and macro-economic factors.

Research

Our research begins with all publicly traded companies listed on the NYSE, Nasdaq, and AMEX. We then identify sectors that in our view may stand to benefit from the economic phase we believe we are currently in or evolving into. We then screen the stocks within the identified sectors using fundamental and technical analysis. We conclude by cross checking our internal research with other well-respected analyst recommendations before we make our final selections.

Approach

Split Rock Private Trading & Wealth Management strategically manages its Equity Rotation SMA by continually monitoring which phase of the economic cycle we are currently in. Economic cycles are divided into 4 separate phases: early cycle, mid cycle, late cycle, and recession. Based on which cycle we deem the economy to be in, we make judgments about whether some sectors may stand to benefit over others. For example, in a recessionary phase, defensive stocks such as consumer staples tend to outperform the wider market. Even during periods of high unemployment and economic recession, people still need consumer staple companies to provide them with food, beverages, toilet paper, soap, etc. Inversely, in an early cycle recovery, consumer discretionary stocks tend to outperform. For example, as unemployment falls, more people have money to spend on discretionary items such as new TVs, cars, etc.

Our strategy is driven primarily by fundamental analysis. We tend to favor companies with consistent growth and stability of earnings and dividends, limited debt, low P/E multiples relative to peers, and strong cash flows. We supplement our research with technical analysis, focusing on moving averages and support levels, as well as identifying current and potential industry trends.

Allocation discipline

Our Allocation Discipline revolves around two basic principles:

  • Number of Holdings = Typically no more than 50
  • Individual Holding Weightings = Typically minimum 2%, Maximum 15%.

The portfolio will typically hold 25% in ETFs and 75% in stocks and projected turnover will be around 30% per year.

Rebalancing techniques are based on either tactical or performance related-adjustments (through Sell Limit or Stop Orders). Following trades, proceeds are used to rebalance existing holdings, held in cash for future buying opportunities, or used to enter new positions.

Sell discipline

Our sell discipline is based on many factors including but not limited to:

1. Strategic and tactical adjustments as discussed earlier.

2. Using trailing limit orders to help protect gains or minimize losses.

3. Ongoing fundamental and technical analysis.

All performance information on this page is based on the performance of the Portfolio Manager’s account. Client performance may differ. This information was calculated on November 15, 2018.

Daily returns
Performance
S&P 500 ETF
Manager (net of fees )
Last 30 days -3.3% -2.6%
Last 90 days -5.1% -3.8%
Last 365 Days - 8.4%
Since inception 4.0% 4.8%
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About Split Rock

Split Rock Private Trading & Wealth Management is a registered investment adviser based in Minneapolis. Split Rock provides access to several specialized investment portfolios. They currently operate and manage an Equity Rotation portfolio that strives to identify and understand economic and business cycle conditions and allocate funds accordingly. Split Rock also manages a North American Shale Energy portfolio that seeks to invest into the Bakken and other various major U.S. Shale plays. It invests funds according to each individual company’s strength of position and growth potential within those shale deposits.

Investment process

Split Rock employs a top down, fundamentally driven approach to investing. Portfolios are adjusted on a regular basis depending on economic and geopolitical conditions.

Important Information

  1. Past performance is no guarantee of future results, and all investments, including those in this portfolio, involve the risk of loss, including loss of principal and a reduction in earnings.  
  2. All performance information on this page is based on the performance of the Portfolio Manager’s account, using the manager’s own funds. Portfolio Manager’s pre-IBKR Asset Management performance information may include performance of non-IBKR Asset Management client accounts. Performance of the Portfolio Manager's account is calculated by IBKR Asset Management on a daily time-weighted basis, including cash, dividends and earnings distributions and reflects the deduction of broker commissions. Manager returns include trades and positions that fail IBKR Asset Management's trading rules, as a result, actual client returns will differ. IBKR Asset Management advisory fees are simulated and applied retroactively to present the portfolio return "net-of-fees".
  3. None of the performance information displayed on this page is based on the actual performance of any IBKR Asset Management client account investing in this portfolio. The performance in an IBKR Asset Management client account invested in this portfolio may differ (i.e., be lower or higher) from the Portfolio Manager’s account performance based on any trading restrictions imposed by the client (resulting in different account holdings), time of initial investment, amount of investment, frequency and size of cash flows in and out of the client account, applicable brokerage commissions, and different corporate actions. Clients investing in this portfolio may view the actual performance of their investment in this portfolio by logging into their IBKR Asset Management account and reviewing their customized dashboard.
  4. All graph data is as of the end of day for the referenced period, unless otherwise specified. The investment minimum is the minimum investment required to follow a particular portfolio. The minimum amount is determined by IBKR Asset Management, based on the characteristics of the underlying portfolio. It should not be considered as specific investment advice for your investment situation.
  5. The performance charts are provided for informational purposes only, and should not be used as the basis for making an investment decision. We rely on mathematical formulas, computer programs, and pricing information from third-party vendors to provide these returns. Neither IBKR Asset Management nor any of its data or content providers shall be liable for any errors in this information or any actions taken by you in reliance upon this information.
  6. Benchmark returns displayed have been calculated by IBKR Asset Management using daily adjusted close prices and include dividend income. More information here. For certain portfolios IBKR Asset Management uses an index as a benchmark, while for others it uses an investable exchange traded fund (ETF) as a benchmark. Index returns do not reflect the deduction of any management fees, transaction costs or expenses. Individuals cannot invest directly in an index. Investable ETF returns reflect the deduction of (i.e., are net of) management fees, transaction costs and expenses.
  7. All Portfolio Manager information including personal data, profiles, strategies, monthly investment reports, and historical results outside of IBKR Asset Management has been provided by the Portfolio Manager. IBKR Asset Management makes no representation or warranty of its accuracy, completeness or relevance and it does not represent the opinions of IBKR Asset Management. Transaction history of Portfolio Managers is available upon request. Portfolio classifications are provided by IBKR Asset Management, and are intended to serve as a general guide.
  8. Not all transactions listed will appear in accounts due to IBKR Asset Management's trading rules and individual client constraints. Eligibility of these securities is monitored periodically, and may change over time. Actual client investment holdings may vary.
  9. This portfolio was launched on IBKR Asset Management on April 24, 2018.
  10. The Portfolio Manager could use short selling to manage this portfolio. Short selling is more complex than simply owning securities, involves a high degree of risk, is highly speculative, and is not suitable for all investors. The risk of loss associated with short selling is virtually unlimited. Short selling may also involve additional expenses and risks, including hard-to-borrow stock charges and buy-in risk. You should only select a portfolio using short selling if you are comfortable with the level of risk involved in short selling.
  11. The Portfolio Manager could use borrowed funds or leverage to fund investments in this portfolio. Leverage indicates the level of margin utilized and is calculated by dividing gross exposure by portfolio net liquidation value. Leverage involves a high degree of risk, is highly speculative, and is not suitable for all investors. Leverage increases both the amount you may lose and the amount you may make in a portfolio, leading to higher returns in the case of favorable market movements but also larger losses under adverse market conditions. You may also incur additional expenses associated with borrowing funds. You should only select a portfolio using leverage if you are comfortable with the level of risk involved in using leverage.