's Sector Rotation ETF Strategy

As of September 30, 2019, our Sector Rotation ETF Strategy had outperformed the entire S&P 500 index despite its solid performance!

2019 Sector Rotation ETF Strategy

From the desk of Jerry Robinson...

A few years ago, I stumbled across an interesting white paper entitled Relative Strength Strategies for Investing written by Meb Faber of Cambria Investment Management. The paper demonstrated a powerful (but simple) investment strategy that outperformed the typical “buy-and-hold” strategy nearly 70% of the time.

Faber’s research, which was based upon 80+ years of stock market data, revealed an astoundingly simple way to beat the marketPut simply, the strategy involves buying sector-based ETFs that have recently outperformed their peers.

Instead of simply buying a plain vanilla S&P 500 index fund (like SPY),  this strategy seeks to beat the return of the benchmark index by investing in the underlying S&P 500 sectors displaying the most relative strength.

Here at, we have adopted Faber's approach and have created a model ETF portfolio based upon his sector research.

So far, the results have been impressive.

As of Q3 2019, our Sector ETF model portfolio (+22.8%) of just three sector ETFs was beating the S&P 500 index (+19.1%).

In 2018, our Sector ETF Rotation Portfolio (-2.00%) beat the performance of the annual performance S&P 500 index (-4.38%). Though the market closed in the red for the year, our sector rotation strategy managed to lose less on the year. 

In 2017, our Sector ETF Rotation Portfolio (+22.22%) beat the annual performance of the S&P 500 index (+19.42%).

In 2016, our Sector ETF Rotation Portfolio (+11.01) slightly underperformed the S&P 500 index (+11.24%).

So, here's how it all works...

We track and analyze the price and volume data from the 11 sector ETFs each quarter to determine the three strongest ETFs to hold into our model portfolio.

Our members receive a quarterly email alert containing any changes to the Sector ETF model portfolio along with Jerry Robinson's latest charts and sector commentary.

Members can view our current Sector ETF model portfolio here.

Not a member? View plans/pricing here 

2016: Our Sector Rotation ETF Strategy kept pace with the S&P 500 in the face of massive uncertainty during a highly volatile election year!

Subscribers: View Our Current Sector ETF Investments here
Not a subscriber? View our plans/pricing here

Meet the Nine Sectors of the S&P 500 Index 

Frequently Asked Questions

  • q-iconHow does the Sector Rotation ETF Strategy work?

    Each quarter we track and analyze all 11 S&P 500 sectors based upon: trailing total returns, including dividends, relative strength, and our own technical and fundamental analysis.

    After conducting our research, we present our members with the top 3 ranked sectors based upon our criteria. Our members have full online access to our Sector ETF model portfolio and receive quarterly email alerts with the three top ranked ETFs we plan to hold for the following quarter, charts, and our latest sector commentary.

  • q-iconHow has this strategy performed over the long-term?

    The tremendous benefits of sector rotation are documented in Meb Faber’s 22-page white paper here. It’s a quick read and contains some very interesting insights, especially regarding how to optimize the portfolio for the best possible returns. According to his research, his sector rotation strategy beat its underlying index 70% of the time.

    Also, you should know that Faber’s paper is based upon a different index than the S&P 500. But that’s okay, as the strategy can be applied to any multi-sector index.

    It’s a very simple investment strategy that is easy to implement — which is why we like it — and has historically beaten the market.

    However, past results are no guarantee of the future performance of this — or any — strategy.

    Our Sector ETF model portfolio is shared with our members for informational and educational purposes only. You should always consult a financial advisor before making any investment decisions. 

  • q-iconHow often do you rebalance the Sector ETF model portfolio?

    We share up to three of the leading sectors for the following quarter four times per year, each at the beginning of January, April, July, and October.

    We adjust our Sector ETF model portfolio once a quarter and only when the top three sectors change. In the event that our top sectors remain the same from one quarter to the next, there would be no rebalancing necessary.


  • q-iconWhy is this strategy better than just buying and holding a low-cost S&P 500 Index ETF?

    We are not saying it is “better.” 

    Sector rotation is just one strategy among many. It may not be right for everyone. Of course, sector rotation strategies focus upon the top performing sectors within the S&P 500. This provides much more direct exposure to the market’s leaders and less to the market’s laggards. This, in turn, can boost returns over time if the current uptrend continues in your selected sector(s).

    We have personally been using this sector rotation strategy for around five years and have been pleased with the results. We share which sectors we are buying at the beginning of each quarter with our Gold and Platinum members. If you would like online access to our Sector ETF model portfolio and to receive our quarterly email alerts, you can learn more here.


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