Invest In ETF’S With The Sector Rotation Strategy

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July 14, 2009 9:52am NYSE:XLB NYSE:XLE

strategyOne momentum strategy that an investor could implement would be to purchase the best returning US sector ETF(s) over the trailing 3, 6, and 12 months. This strategy has been written about extensively by Mebane Faber, author of The Ivy Portfolio.


Scott From Scotts Investments writes “In order to further assist investors in implementing alternative strategies, I will begin tracking this portfolio on the first of every month on my blog,Scott’s Investments.  At the end of June, here is the breakdown of the performance of the 9 US Sector SPDR ETFs using the sum of the 3, 6, and 12 month returns. The strategy is simple, purchase the top 1, 2, or 3 best performing ETFs at the start of the month and hold until the beginning of the next month. The top 3 at the end of June were Technology, Consumer Discretionary, and Healtcare:”

Symbol Description 3 month 6 month 1 year Sum
XLY Consumer Disc 17.46% 7.00% -18.96% 5.50%
XLP Consumer Staple 8.96% -3.69% -14.06% -8.79%
XLE Energy 13.17% 0.59% -45.69% -31.94%
XLF Financial 35.64% -4.55% -41.02% -9.93%
XLV Healthcare 8.67% -0.90% -13.96% -6.19%
XLI Industrial 19.15% -6.23% -35.43% -22.51%
XLB Materials 16.16% 13.46% -38.17% -8.55%
XLK Technology 16.58% 18.17% -20.52% 14.24%
XLU Utilities 9.16% -3.93% -31.47% -26.24

Full Article: HERE

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