What Is Sector Rotation?
Definition: Sector rotation is the strategic movement of capital from one sector of the economy to another in order to take advantage of different phases of the business cycle and market conditions. Investors “rotate” into sectors they expect to outperform and out of those likely to underperform in the near future. Example: When the economy is growing, investors might rotate into technology or consumer discretionary stocks. When recession fears grow, they may rotate into utilities, healthcare, or consumer staples, which …
