Main Management

The Main Management Active Sector Rotation is managed in a tax-aware manner from the top-down, primary using passive sector and industry-based ETF's, paired with a bottom-up approach by focusing on fundamentals, valuations, and industry trends.

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1. FUNDAMENTALS:
   The first step of the investment process is to identify sector, industry, and sub-industry-based ETF's that appear undervalued relative to history and the rest of the market based on valuation and growth metrics.
2. CATALYSTS
   The second step is to identify an appropriate catalyst or macroeconomic trend that can help close that valuation discount and lead to price appreciation.

This two-step approach results in sector exposure that is overweight or underweight relative to the benchmark; overweight in favorable sectors and underweight in unfavorable sectors. Additionally, the process results in buy/sell price targets for the sector, along with a time frame that the Investment Committee can actively monitor and discuss.

The Main Management BuyWrite writes covered call options on a diversified portfolio of broad market indexes with the goal of generating income and reducing volatility. The strategy contains a global ETF allocation paired with a covered call option overlay. As part of the synergistic allocation process, underlying ETF positions are selected with their respective options markets in mind.

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The strategy is actively managed from the top-down– using passive index-based ETFs with the greatest risk-adjusted potential for price appreciation and call-writing opportunity – paired with a bottom-up approach by focusing on fundamentals, valuations, and industry trends. The options can be written in, at, or out of the money based on the Investment Committee's outlook on the overall market as well as the more specific areas contained in the portfolio. Finally, the strategy targets a 50 bps monthly yield from a combination of the three income streams: dividends, options premiums, and underlying asset appreciation.