Sector Rotation (Faber QTAA-Sectors) at a glance

Sector Rotation (Faber QTAA-Sectors) is a tactical asset allocation (TAA) strategy by Meb Faber, rebalanced monthly. Backtested 1986-02-28 to 2026-07-03 (40.3 years): 10.2% CAGR, 0.79 Sharpe, -35.7% max drawdown, 14.0% volatility.

Type

Tactical (TAA)

Author

Meb Faber

Rebalancing

Monthly

Risk

Moderate

Period

1986-02-28 to 2026-07-03

CAGR

10.2%

Sharpe

0.79

Max Drawdown

-35.7%

Volatility

14.0%

Sector Rotation (Faber QTAA-Sectors): frequently asked questions

What is Sector Rotation (Faber QTAA-Sectors)?

Monthly sector rotation across 8 US SPDR sector ETFs. Ranks each sector by 1/3/6/12-month average momentum and holds the top N (default 3). Optional 10-month SMA absolute filter routes failed sectors to cash. Deep-history backfill via Fama-French sector portfolios.

Who created the Sector Rotation (Faber QTAA-Sectors) strategy?

Sector Rotation (Faber QTAA-Sectors) was developed by Meb Faber.

What is the historical return and maximum drawdown of Sector Rotation (Faber QTAA-Sectors)?

Backtested from 1986-02-28 to 2026-07-03, Sector Rotation (Faber QTAA-Sectors) returned 10.2% CAGR with a -35.7% maximum drawdown and a Sharpe ratio of 0.79. Past performance does not guarantee future results.

How often is Sector Rotation (Faber QTAA-Sectors) rebalanced?

Sector Rotation (Faber QTAA-Sectors) is rebalanced monthly. BestFolio publishes the updated allocation signal each period.

Is Sector Rotation (Faber QTAA-Sectors) a tactical asset allocation strategy?

Yes. Sector Rotation (Faber QTAA-Sectors) is a tactical asset allocation (TAA) strategy: it adjusts its holdings based on market signals each period rather than holding a fixed allocation.