What Is An Adaptive Innovation Strategy?

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The Tactical Adaptive Innovation Strategy is designed to provide investors with a lower risk avenue to invest in leading edge technologies including: big data & analytics, nanotechnology, medicine, networks, energy & environment, robotics, 3-D printing, bioinformatics, and financial services), These sectors are known for high growth and high returns but also come with very high volatility. The Tactical Adaptive Innovation Strategy provides much of the potential return while limiting the volatility.

Unfortunately, available history for innovation style ETFs is limited so my backtests are short. While there are several ETFs which lay claim to sectors of these technologies, the pickings for quality are pretty slim. Three ARK ETFs (ARKK, ARKQ, ARKW) stand head and shoulders above the others I have tested; however the volatility is quite high. I have dampened the volatility by limiting investment in innovation ETFs to Balanced and Favorable market conditions and incorporating Treasury ETFs which tend to do well during Hostile conditions.

The Strategy invests in the 2 strongest funds from among the 3 ARK funds and 2 Treasury Funds. If none of the funds have a positive TrendScore, the Strategy goes to cash.

This is intended as a supplemental strategy suitable for a small portion of a portfolio.

This is equal weight buy and hold three innovation ETFs

This is Tactical Adaptive Innovation which selects two ETFs from among the 3 innovation ETFs and 2 Treasury ETFs.