Using sector rotation to dissect performance

Past performance is no guarantee of future results. That is not just an SEC requirement on advertising, it is a statistical fact. Unfortunately for consultants, investors and trustees, there is no statistical relationship between past returns and future performance. Historic returns can be diligentl...

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Bibliographic Details
Published inPensions & Investments Vol. 28; no. 9; p. 122
Main Author Callahan, Craig T
Format Trade Publication Article
LanguageEnglish
Published Chicago Crain Communications, Incorporated 01.05.2000
Subjects
Book value
Boxes
Energy industry
Financial services
Investment advisors
Investment policy
Large cap investments
Leadership
Managers
Methods
Mid cap investments
Portfolio performance
Rates of return
Ratios
Small cap investments
Stocks
Trends
United States > US
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Summary:Past performance is no guarantee of future results. That is not just an SEC requirement on advertising, it is a statistical fact. Unfortunately for consultants, investors and trustees, there is no statistical relationship between past returns and future performance. Historic returns can be diligently analyzed, but they contain little predictive content. Sector and industry rotation contribute to this lack of predictability. Not only does sector and industry rotation explain manager performance and style leadership, it also should be considered when adding a certain style to a portfolio. This current research examines the relationship between style performance and sector and industry rotation.
ISSN:1050-4974
1944-7671