ELEV8 Model Performance: May 29, 2026 – June 30, 2026
The model’s performance vs. the reference security (VOO) was driven largely by Technology sector performance in June. The model gained +65bps in June vs VOO largely due to the Technology sector’s ability to rebound into month end and finish ahead of the S&P 500 (+48bps). An overweight position in the Industrials sector (VIS, +717bps) helped performance. The model gave back alpha by being underweight low vol. sectors, particularly the Healthcare sector (VHT, + 789bps) which rebounded on strong Pharma and Biotech earnings to lead all sectors in June.
Longer-term Performance
As the chart above notes, the past 12-months have been challenging for our monthly active model. 2026 in particular has presented stark geopolitical challenges from US military action in Venezuela and Iran. Those campaigns have created strong near-term whip-saw dynamics across the commodities complex which, in turn, have exerted strong influence on the suite of macro indicators we follow and use to mitigate near-term price volatility. The timing of these events couldn’t have been worse relative to our month-end rebalance structure as both the commencement of the Venezuela operation and the ceasefire agreement with Iran happened the day after we rebalanced for the month and both went against our positioning.
Our research efforts around this monthly research model have led us to considering longer rebalance periods to help mitigate near-term transition risk. That said, with geopolitical tensions receding, we’ve seen improvement in the model’s near-term performance. The model has seen improved performance since the end of April as the chart below shows, adding 239bps vs. the reference security VOO during the period.
Conclusion
With geopolitical dynamics fading as the market’s motive force, we’re seeing investors discounting a continued business cycle expansion and a more hawkish Fed policy to go along with it. This likely keeps the momentum/AI trade somewhat restrained. We’d expect continued broadening of upside participation at the sector level, but with a clear understanding that bullish AI news and AI-driven profitability will continue to be momentum triggers.
About ELEV8
We introduced the ELEV8 Sector Rotation Model in May of 2024. Here’s a look under the hood at the inputs we use to score the 11 GICS Sectors and our resulting positions. The model includes up to 14 indicators that range from:
- Stock Level Technical Characteristics
- Macro-overlays:
- equity trend (S&P 500)
- interest rate trend (10yr US Treasury Yield)
- commodities trend (Bloomberg Commodities Index)
- USD trend (vs. EUR & Broad Currency Indices)
- Relative performance vs. the benchmark S&P 500
- Overbought/Oversold oscillator studies
We use the largest passive sector-based ETF by AUM ($) for each sector as our proxy for ELEV8 sector positions. We select 8 out of 11 Sectors each month and have no exposure to the 3 sectors with the lowest scores in our model.
Data from Factset Research Systems Inc.
Disclaimer: This material is for informational and educational purposes only and should not be considered investment advice, a recommendation, or a solicitation to buy or sell any ETF, security, country exposure, or investment strategy. Country ETF flows and performance can change quickly and may reflect short-term positioning rather than durable investor conviction. International investing involves currency, geopolitical, liquidity, regulatory, and macroeconomic risks. Past performance is not indicative of future results. Investors should consider objectives, risk tolerance, liquidity needs, and consult a qualified financial professional before making investment decisions.
