August 4, 2025
We introduced our Elev8 model in June of 2024 and have been running it in its current form since August 28, 2024. Each month we review the previous month’s positioning and performance to identify what worked and what needs improvement. A brief description of the Elev8 model and its inputs follows the review as an appendix.
Elev8 Model Indicator Dashboard & Positions (July 2025)
Key: Pattern = L/T (1yr+) Price Pattern of the Sector ETF, Mean Rating = simple average of 1-6 ratings (buyàsell) of all stocks within the sector, WTD Mean Rating = Cap Weighted Sector Constituent rating, OB = Overbought, OS = Oversold, N=Neutral
Performance Recap: Elev8 Performance vs. Benchmark (July 2025)
Performance Recap: Elev8 Performance vs. Benchmark (Sept. 1, 2024 – July 31, 2025)
What Worked in July
Per the handy model analyzer from our friends at ETFAction, we added 81bps above the benchmark return in July, bringing our total excess return to +283 bps since September 2024.
Our biggest long active weight in July was an overweight position of 4.61% in VGT vs. our S&P 500 benchmark. The model had conviction in The Technology Sector due to broad participation in the equity bullish reversal, outperformance at the industry level within the sector and a bullish profile in our quantitative overlay. The sector was the top performer for the month outperforming the S&P 500 by 2.35%
The model was underweighting low vol. exposures in July with zero weight positions in Real Estate (-2.91% vs. S&P 500) and Healthcare (-6.72% vs. S&P 500) as the model positioned us with the bull trend and generally higher beta exposures.
What didn’t work in July
Narrow upside leadership at the sector level was a theme again in July. Similar to June, Technology and Industrial sectors outperformed, but the only other sector to gain vs. the S&P 500 was the Utilities sector (where Elv8 was just below market weight (-0.84% vs. S&P 500 weight). The model positioned us across the full array of sectors that benefit from rising equity prices, Financials, Discretionary and Comm. Services longs in addition to Tech and Industrials. In hindsight, investors took all 3 of those former sectors lower and we underperformed in each as we were long.
August Positioning
Our model starts August pulling in some higher beta exposures. The model has us tactically short the Discretionary Sector (-2.87%) and tactically long the Utilities Sector (+3.85%) while maintaining Tech and Industrial long positions and zero-weight positions in Healthcare, Materials and Real Estate for a 3rd straight month. We are trying to balance out the probabilities of a seasonal correction with those of a continued Growth-led bull market.
Attribution provided by ETFAction, https://www.etfaction.com/
Other data provided by FactSet Research Systems Inc.
Appendix: What is the Elev8 Model
Elev8 Model
Elev8 is a sector rotation model that seeks to outperform the S&P 500 on a yearly basis by actively managing sector exposures relative to our simulated S&P 500 benchmark. The model seeks to generate alpha over its benchmark by allocating 100% of the portfolio to 8 of the 11 GICS Sectors comprising the S&P 500. It picks the 8 sectors that have the strongest scores in the model’s up to 14 inputs while having no exposure to 3 of the GICS Sectors that have the weakest scores in the model each month. The model can be above or below benchmark weight in the sectors it does have positions in.
Elev8 Model Inputs
- 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 at the sector and industry level
- Overbought/Oversold oscillator studies
