Sector rotation

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Sector rotation

An active asset management strategy certain sectors, that tactically overweights and underweights depending on expected performance. Sometimes called rotation.
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Sector Rotation

An investment strategy in which a portfolio overweights or underweights certain sectors in accordance with expected performance. Sector rotation is a form of active investment management; the portfolio manager observes market trends and alters the composition of the portfolio in order to earn the highest possible return. Sector rotation is fairly high risk, as a portfolio's systematic overweighting and underweighting means that is not efficiently diversified. See also: Markowitz portfolio theory.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

sector rotation

An investment strategy involving the movement of investments from one industry sector to another in an attempt to beat the market. For example, an investor might rotate investments among consumer durables, technology, and energy securities as economic fundamentals and valuations in each of these sectors change. Also called group rotation.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.

Sector rotation.

Sector rotation refers to the shifting of investments among different sectors of the economy.

At any given time, certain sectors will be performing better than others. Investment managers use sector rotation strategies to capitalize on the current economic cycle and maximize profits.

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References in periodicals archive ?
But gains have come in volatile trading in the past year, characterized by frequent sector rotations.
Essentially, we attempt to identify the turning points in country and sector rotations. We closed our more bullish call on Russia on 12 Mar on signs of heightened risk aversion (the market peaked on 16 Mar) and retain our cautious stance, noting that MSCI Russia has fallen 11% since its peak.
On the international stock markets, sector rotations out of new economy into the more defensive old economy stocks in the last few weeks have been dramatic.