iQ Sector Rotation Model



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Sector Rotation trading strategies are popular because they can improve risk-adjusted returns and automate the investing process. Momentum investing, which is at the heart of the sector rotation strategy, seeks to invest in sectors showing the strongest performance over a specific timeframe.

The Sector Rotation Model selects the top 3 (our of 10 sectors) every two months based on price momentum.


  1. Start with the 10 sectors of the S&P 500.

  2. Rank the sectors by 12-month less 6-month price momentum and select the top 3 sectors.

  3. Each sector is represented by a unique 5-stock screen resulting in a portfolio of fifteen large-cap stocks.

  4. Rebalance every two months.