Ride Market Cycles with a Sector Rotation ETF | ETF Trends

As the economy chugs along, market sectors will rise or fall. Some have capitalized on this trend through a sector rotation strategy through an actively managed exchange traded fund.

The Huntington U.S. Equity Rotation Strategy ETF (NYSEArca: HUSE) holds stocks from the S&P Composite 1500, which tracks large-, mid- and small-cap U.S. companies, and will overweight or underweight various sectors based on potential for capital appreciation given current market conditions.

The managers will select components based on a bottom up analysis that factors in management track record, balance sheet management and favorable growth trends, writes Roger Nusbaum for TheStreet.

About 30% of the fund is overweight sectors that the managers favor in the current economic cycle, which include health care at 21.7% and technology at 19.1%.

Nusbaum notes the curious decision to overweight seemingly conflicting sector picks since health care is typically seen as a defensive non-cyclical sector, whereas technology companies tend to act more cyclical.