Sector rotation is a strategy used by investors whereby they hold an overweight position in strong sectors and underweight positions in weaker sectors. Exchange-traded funds (ETFs) that concentrate on specific industry sectors offer investors a straightforward way to participate in the rotation of an industry sector.
What is the Blackrock US sector rotation index?
Incept. The BlackRock US Sector Rotation Index seeks to deliver a disciplined, consistent approach to sector investing. The index rotates between eleven U.S. sectors by using proprietary forward-looking signals across two broad categories that measure market sentiment and financial fundamentals.
How can a sector rotation strategy be profitable?
In order to be profitable, a successful sector rotation strategy must not only beat the market, but also beat it by a large enough margin to exceed its commissions and transaction costs. The calendar strategy takes advantage of those sectors that tend to do well during specific times of the year.
