Adaptive Sector Rotation for Modern Markets
MG Sector helps investors adapt to fast-changing markets by dynamically identifying opportunities across U.S. equity sectors. Using a machine-learning-driven approach, the strategy evaluates sector performance and allocates capital toward sectors showing relative strength while reducing exposure to those exhibiting deterioration.
Portfolio Construction
Universe Construction
Only U.S. sector ETFs with continuous liquidity monitoring.
• Weighted by signal strength
• Biweekly rebalancing
ML Model Development
Machine-learning model trained using rolling windows to reduce overfitting and adapt to regime changes.
Scoring Framework
Signals transformed into standardized cross-sectional sector scores.
A Better Approach to Sector Rotation
MG Sector is designed to address the structural weaknesses of traditional sector rotation. Traditional approaches struggle because sector compositions have changed, global revenue exposure reduces domestic macro sensitivity, sector–macro relationships evolve over time, and economic cycle timing is inherently uncertain.
MG Sector addresses these challenges through a machine-learning framework trained out-of-sample and designed to adapt as market regimes evolve. The strategy applies a behavioural-finance approach targeting sector mean reversion rather than relying on macro forecasts.
