iQ Domestic Growth Fund Rotation Model

IMPORTANT! On rare occasion, five mutual funds may not make it through this model’s stringent screening process. Unfilled allocations will be allocated to money market if this occurs.

Additionally, in any given seasonal quarter, the Model may have a sizable allocation to one or two sectors.

INVESTMENT OBJECTIVE

The iQ Domestic Growth Fund Rotation Model seeks to achieve long-term capital appreciation by dynamically rotating among a diversified portfolio of domestic stock mutual funds based on a disciplined, rules-based approach.

RULES-BASED SELECTION PROCESS

The iQ Domestic Growth Fund Rotation Model selects the top five domestic stock mutual funds from the following two time-tested and rules-based strategies:

Strategy One:

• Begin with a starting universe of all domestic stock mutual funds that are NTF (no transaction fee) on most of our members’ platforms

• Remove every mutual fund whose month end price is below its 3-month simple moving average.

• Sort the remaining mutual funds by 5-month exponential price momentum and keep the top twenty-five

• Sort the remaining mutual funds by 24-month upside capture ratio (to the S&P 500) select the top 5

Strategy Two:

• Begin with a starting universe of all domestic stock mutual funds that are NTF (no transaction fee) on most of our members’ platforms

• Remove every mutual fund with a negative one-month return.

• Sort the remaining mutual funds by one-month return and select the top twenty-five

• Sort the remaining mutual funds by their 3-month simple moving average divided by their 12-month simple moving average and select the top 5

  The model reconstitutes every Feb, May, Aug, and Nov

IMPORTANT! On rare occasion, five mutual funds may not make it through the screening process. Unfilled allocations will be allocated to money market if this occurs.

Potential Benefits of the Model:

The iQ Domestic Growth Fund Rotation Model, which employs a multi-factor approach to selecting domestic stock mutual funds, offers several benefits:

1. Responsive Strategy: Adapts to market changes by rotating among domestic stock mutual funds based on technical indicators.

2. Data-Driven Fund Selection: Utilizes historical upside capture ratios to choose funds with strong past performance in market upswings, aiming for maximized returns.

3. Risk Management: Ability to convert to cash when funds don't meet strict criteria, providing a safeguard during market instability.

4. Quantitative Approach: Relies on technical analysis and stringent criteria for investment decisions, reducing emotional biases.

5. Diversification and Flexibility: Ensures risk spreading within domestic stocks and offers flexibility to capitalize on market trends.

Rotational investment models carry the risk of misjudging market trends, potentially leading to suboptimal timing and asset allocation decisions.