Sector Rotation Strategies

Here’s an interesting stat:
Financial sector ETFs account for about 2% of assets but 37% of net flows to start the new year (logic is rising rates = more profits for banks charging higher rates on loans). XLF is the US’s biggest financial sector ETF.

With a lot of people looking into financials and energy stocks as part of their sector rotation, what’s your strategy (if any) going into 2022? :slight_smile:


Analysts have predicted that Banking sector (Not Fintech) such as GS, MS, C will be performing well due to interest rate hike 3-4 times this year.

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There is some truth to sector rotation. Don’t have time to dig it out, but there’s analysis historically that when any one sector significantly outperforms the general market, you tend to get a correction.

Banks will become more profitable yes with higher interest rates, but I doubt as much as people think, especially with the lighter neo banks.

Other cyclical industries can include global resources and infrastructure.

I’m already gunning for a Starling IPO, but tbh 2022 would be too early. Get into Europe and have a couple of years profitability behind itself first.

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Yeah we’ve seen this flooding into banking stocks before, especially when the rate hike narrative comes around. Anyways - will be interesting to see how it plays out. Who knows, value stocks might finally have their day in the sun :sunny: