October's Volatility a Reminder that Seasonal Strategy is Worth Considering

“The defensive sectors, Health Care and Consumer Staples, have performed better than the overall market during the period May through October,” said O’Hara. “The period between November through April shows that Consumer Discretionary, Info Tech, Materials and Industrials have historically performed better than the overall market.  So, the ideal investor for SZNE is a long-term Investor who desires an alternative to simply buying the broad market through one of the cheap beta ETFs because they seek to receive higher returns over time.”

U.S. equities have been racked by volatility the last two months due to a confluence of rising rates, worries of an inverted yield curve and trade wars. SZNE was able to neutralize the volatility through its seasonal rotation strategy with a defensive shift into health care and consumer staples.

“Since its launch, SZNE has been less reactive to some of the external shocks in the market like trade, because of how it is allocated currently in health care and staples,” said O’Hara. “Health care names have been less sensitive to the overall threat of trade and tariffs.”

Furthermore, since the fund utilizes a passive strategy, haphazard adjustments to the portfolio are avoided even during market downturns. It speaks to SZNE’s resilience in the markets and its unflinching strategy–“sell in May and go away.”

Investors can visit PacerETFs for more information on their various funds.

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