Tactical Sector Rotation Strategy: 2021 Review And Outlook

Jan. 31, 2022 9:00 AM ETSPY, IVV, VOO, XLF, XLE, XLI1 Comment
Francois Soto, CFA profile picture
Francois Soto, CFA


  • Despite various threats to the economy, US equities grew in 2021, and the S&P 500 finished the year near a record-high level.
  • Since the previous business cycle shift, our Tactical Sector Rotation Strategy has outperformed the S&P 500 during this period.
  • As we move into 2022, the economy is expected to enter a new business cycle. New sectors are recommended to benefit from this shift.

toy windmill air outdoor twirl garden play concept

Pixygirlly/iStock via Getty Images


2021 was a year of recovery following a stressful 2020, as investors had high hopes that the business environment would get back to normalcy. The vaccine rollout and the easing of COVID-related restrictions led the economy

Sector Performance



U.S. Bureau of Labor Statistics

Chart #1


Strategy Performance


Monthly Performance


Chart #2


Chart #3


This article was written by

Francois Soto, CFA profile picture
François Soto is Factor-Based Asset Management’s President and Portfolio Manager. He is leading the investment process for various model portfolio strategies while also overseeing equity research. Before creating the firm, François accumulated 15 years of experience working for various financial institutions. François holds a MBA degree specializing in Finance from HEC Montreal (2011) and is a CFA charterholder (2016), a FRM charterholder (2010) and a CIM charterholder (2010).

Disclosure: I/we have a beneficial long position in the shares of XLE, XLF, XLI either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

Recommended For You

Comments (1)

To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.