What is Sector Rotation?
Sector Rotation A tactical portfolio management strategy that shifts investment capital among industry sectors to capitalize on economic or market cycles, based on sector performance trends, macroeconomic indicators, or forward-looking analysis (CFA Institute, Bloomberg).
Source: CFA Institute, IFRS Foundation, FASB (GAAP), Basel III Framework
How is “Sector Rotation” Used in Practice?
Sector rotation strategies aim to overweight sectors expected to outperform and underweight those likely to underperform during specific economic cycles.
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Who Needs to Know This Term?
- Financial Analysts
- Bankers
- Traders
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What is Sector Rotation?
A tactical portfolio management strategy that shifts investment capital among industry sectors to capitalize on economic or market cycles, based on sector performance trends, macroeconomic indicators, or forward-looking analysis (CFA Institute, Bloomberg).
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