Sector Rotation (Faber QTAA-Sectors)
Sector Rotation (Faber QTAA-Sectors) is a tactical asset allocation strategy reviewed on a monthly cadence. Its hypothetical backtest runs through 2026-08-18. BestFolio supplies the public rule or approach and backtest context; current signals, allocations, and paid interactive data remain restricted to Pro access. No publication or construction date is recorded, so no observed-versus-simulated boundary is claimed; all displayed returns are hypothetical. Users review each scheduled signal and place any resulting trades in their own brokerage. BestFolio does not execute trades or provide personalized investment advice.
- Cadence
- Monthly
- Backtest data through
- 2026-08-18
- History boundary
- No publication or construction date is recorded, so no observed-versus-simulated boundary is claimed; all displayed returns are hypothetical.
- Rule / approach
- Monthly sector rotation across 8 US SPDR sector ETFs.
- BestFolio supplies
- the public rule or approach and backtest context; current signals, allocations, and paid interactive data remain restricted to Pro access
- Customer action
- Review each scheduled signal and place any required trades in your own brokerage; BestFolio does not execute orders.
- Costs and exclusions
- net of a modeled one-way transaction cost (10 bps, scaled up to 3x under stress); taxes, fund-expense drift, or market impact are not modeled
- Freshness
- The latest available backtest ends 2026-08-18. A run timestamp is not exposed here, so no stronger freshness claim is made.
- Next expected action
- First trading day of September; scheduled 2026-09-01 at 09:30 ET. Review the published signal before placing any trade.
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 2026-08-18 (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 2026-08-18
- CAGR
- 10.2%
- Sharpe
- 0.79
- Max Drawdown
- -35.7%
- Volatility
- 14.0%
Sector Rotation (Faber QTAA-Sectors) — Tactical Asset Allocation Strategy
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.
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 2026-08-18, 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.
Backtest Performance (1986-02-28 to 2026-08-18)
| Metric | Sector Rotation (Faber QTAA-Sectors) |
|---|---|
| CAGR | 10.2% |
| Max Drawdown | -35.7% |
| Sharpe | 0.79 |
| Sortino | 0.98 |
| Volatility | 14.0% |
| Calmar | 0.28 |
| Total Return | 4835.0% |
| Backtest Period | 40.3 years |
Strategy Details
- Type
- Tactical (TAA)
- Rebalancing
- monthly
- Risk Level
- moderate
- Variants
- 3
- Author
- Meb Faber
Categories
Further reading
New to this approach? Read what tactical asset allocation is and how it works.
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