Equity investors may notice that markets may follow a seasonal ebb and flow, especially when comparing the traditional summer and winter months.
In the upcoming webcast, A Seasonal Strategy for Today’s Portfolio, Sean O’Hara, President, Pacer ETFs Distributors, Pacer ETFs; and Sam Stovall, Chief Investment Strategist, CFRA, will help explain the seasonal trends in the equity markets and highlight a seasonal rotation strategy that could give investors exposure to areas that have historically performed better during certain periods of the year.
Specifically, investors can use the Pacer CFRA-Stovall Equal Weight Seasonal Rotation ETF (NYSEArca: SZNE) to take advantage of a seasonal rotation strategy as a way to shift into favorable parts of the market throughout the year.
Pacer partnered up with CFRA and Sam Stovall, its chief investment strategist for U.S. equities, to launch the Pacer CFRA-Stovall Equal Weight Seasonal Rotation ETF, which tries to reflect the performance of an index that alternates exposure semi-annually to certain sectors in the S&P 500 Equal Weight Index. The approach was influenced by the investing adage “Sell in May and Go Away,” where the fund rotates into sectors that have historically fared well during certain times of the year.
From November through April, SZNE will track an equal weight exposure to companies in the consumer discretionary, industrials, information technology and material sectors. On the other hand, from May through October during the perceived down months, the ETF will be exposed to companies in the defensive sectors of consumer staples and health care.
SZNE serves as a prime alternative for the large-cap investor seeking exposure to various sectors, but only during the times of the year when they are thriving.
“Historically, the stock market has exhibited seasonal sector trends,” according to Pacer ETFs. “This strategy rotates between sectors in the spring and fall to give investors exposure to sectors that have historically performed better during these periods.”
The Pacer CFRA-Stovall Equal Weight Seasonal Rotation ETF is currently allocated to 53.6% consumer staples and 46.4% health care, with names like Philip Morris 1.8%, COTY Inc 1.8%, Altria Group 1.8%, Lamb Weston Holdings 1.7% and Church & Dwight 1.7%, among others.
Financial advisors who are interested in learning more about a seasonal rotation strategy can register for the Wednesday, October 30 webcast here.