iQ Bat out of Hell (BoH) Model

INVESTMENT OBJECTIVE

The iQ Bat out of Hell Model is an aggressive 15-stock equity model that seeks to outperform the S&P 500 by focusing on stocks of sector strategies displaying high 3-year relative strength and low relative standard deviation.

Note: Due to its screening process, the iQ Bat out of Hell Model may be concentrated in low-volatility defensive sectors at a time when other sectors are performing better.

INVESTMENT PROCESS

The iQ Bat out of Hell Model follows the following MONTHLY rules-based process:

  • Begin with a starting universe of 12 iQUANT.pro 5-stock strategies for each of the following sectors/industries:

    • Staples, Materials, Healthcare, Financials, Technology, Energy, Real Estate, Discretionary, Industrials, Aerospace (Industry), Utilities, Telecommunications

  • Sort the 12 strategies by 36-month Relative Strength Index (RSI) and keep the top half

  • Sort the remaining iQUANT.pro sector strategies by long-term standard deviation and keep the bottom 3 strategies (15 stocks).

This model reconstitutes every month.

Investing in sector rotational strategies

Investing in sector rotational strategies involves investing in specific sectors or industries that are expected to perform well in the current market environment while avoiding those that are expected to underperform. The goal is to outperform the broad market by overweighting the best-performing sectors and avoiding the worst-performing ones.

One benefit of sector rotational strategies is the potential for higher returns than simply investing in a broad market index. By focusing on the sectors that are expected to perform well, investors can potentially capture larger gains.

Another benefit is the potential for reduced risk. By diversifying investments across multiple sectors, investors can reduce exposure to any single sector's performance. Additionally, by focusing on defensive sectors during times of market volatility or economic uncertainty, investors may be able to mitigate downside risk.

However, it's important to note that sector rotational strategies can be difficult to execute successfully, and investors may miss out on gains in sectors they are underweighting or avoiding.