Economic Cycle Strategy (ECS)

Strategy Overview

The Milwaukee Company’s Economic Cycle Strategy (ECS) is a cyclical investment strategy that seeks to generate alpha by tactically adjusting portfolio allocations to correspond to the current state of the U.S. economy.  ECS uses a combination of the three-month moving average of the Chicago Fed National Activity Index (CFNAI) and a probit model of leading economic indicators developed by The Milwaukee Company to determine the current state of the economic cycle.  We refer to this combined signal as The Milwaukee Company’s Economic Index (MCEI).

Unlike traditional cyclical investment strategies that call for large sector bets based on how past markets have responded to past economic cycles, ECS uniformly over-weights all bond allocations when MCEI signals the economy is contracting; over-weights equities when MCEI signals the economy is experiencing an expansion; and adopts a neutral weighting consistent with the investor’s personal risk tolerance the rest of the time (i.e. when the economy grows at a “normal” pace). 

Components

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  • Diversified Fund Universe

ECS consists of a diversified group of 17 low-cost ETFs that collectively represent significant components of the global securities markets.

 

  • Milwaukee Company Economic Index (MCEI)

MCEI seeks to identify the current state of the economic cycle by using a combined reading of CFNAI and a probit model of leading economic indicators.

 

  • Noise Reduction

The use of a probit model to confirm CFNAI readings not only delivers better results, but also helps in reducing the number of trades that would have been generated as a result of a short-term signal noise.

The Milwaukee Company℠ is a tradename of Estate Counselors, LLC. The information provided herein is believed to be correct and has been obtained from sources that we consider reliable, but we do not guarantee that this information is accurate or complete.  All expressions of opinion reflect our judgment at the present time, but are subject to change. Nothing found herein is intended to be a substitute for personal investment advice. The investments discussed herein are risky in nature and involve a substantial risk of loss, and we do not in any way warrant or guarantee the results you will experience.

Good Company for Your Investments™

Phone: (262) 238-6980

Fax: (262) 238-6999

414 N Main St, Thiensville, WI 53092, USA

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