A Solid Start for Sector Rotation ETF

In 2017, more than 270 exchange traded products debuted in the U.S. Some new exchange traded funds are off to impressive starts. That group includes the Main Sector Rotation ETF (Cboe: SECT), which debuted in September.

The Main Sector Rotation ETF is an actively managed fund that tries to outperform the S&P 500 during rising markets while diminishing losses during declining periods.

“The Main Sector Rotation ETF seeks to achieve its objective through dynamic sector rotation. Sector selection is optimized by carefully reviewing the sector, industry, and sub-industries in the fund’s portfolio and allocating to sectors which appear undervalued and poised to respond favorably to financial market catalysts,” according to Main Management.

As of Dec. 29th, SECT had $239.1 million in assets under management, an impressive sum among 2017’s new ETFs, but even more so when considering the ETF’s September launch.

The active ETF will act like a fund of funds and invest in sector-based equity ETFs, achieving its target through a sector rotation strategy. Main Management will review the sector, industry and sub-industries in the fund’s portfolio, chooses sectors it believes are undervalued and poised to respond favorably to financial market catalysts and sell securities when it achieves its target price or no longer undervalued.

SECT currently holds 10 other ETFs, nine of which are equity funds and one of which is a fixed income fund. Top holdings in SECT include the Technology Select Sector SPDR (NYSEArca: XLK), Financial Select Sector SPDR (NYSEArca: XLF) and the Health Care Select Sector SPDR (NYSEArca: XLV).