Most fund managers use an array of indicators and statistics to shape their investment strategies. For Michael Gayed, the key lies within the S&P 500 utilities sector and U.S. Treasurys.
Gayed manages the ATAC Rotation Investor Fund (ATACX), a tactical fund that's designed to position itself depending on how the S&P 500 utilities sector and Treasurys are performing. This approach has yielded massive returns for the fund's clients.
The fund — which has a five-star Morningstar rating — is up 57.7% for 2020 and ranks in the top percentile among funds in its category. The ATAC fund is outperforming others in the "Tactical Allocation" category by nearly 60 percentage points and its benchmark index by 59.1 percentage points, Morningstar data shows.
CNBC spoke with Gayed, who broke down the strategy.