Sektor-Rotation

SeasonAlpha's Sector Rotation shows which parts of the US equity market historically outperformed in each calendar month. It is built on the eleven SPDR Select Sector ETFs — XLK (Technology), XLF (Financials), XLE (Energy), XLV (Health Care), XLY (Consumer Discretionary), XLP (Consumer Staples), XLI (Industrials), XLB (Materials), XLU (Utilities), XLRE (Real Estate) and XLC (Communication Services) — plus specialty and industry ETFs such as SMH, XBI, GDX or XOP, for 23 US sector ETFs in total. For each sector the tool computes the average return per calendar month over many years and presents it as a heatmap, ranking and cumulative yearly path.

How to read the monthly sector ranking: the rotation signal at the top lists the four sectors that were historically strongest in the current month, sorted by average monthly return. The Top & Flop table shows the three best and three weakest sectors for each of the twelve months, with the current month highlighted. In the heatmap, each column is a sector and each row a month: green cells mark historically strong, red cells weak monthly returns. The win-rate heatmap adds in what share of years a sector closed a given month positive — a high average return paired with a low win rate points to a few outlier years.

On methodology: for each sector ETF the last closing price per month is taken and the percentage change versus the previous month is computed (the monthly return). These monthly returns are averaged across all available years within the selected window — adjustable from 5 to 30 years — requiring at least five years per month for a value to count as valid. The cumulative yearly path adds these average monthly returns from January to December, revealing a sector's typical seasonal trajectory. All figures come from daily-updated price data (Yahoo Finance via Supabase) and are computed in the browser from the real history.

An important note on interpretation: seasonality describes past averages, not a forecast. A sector being historically strong in a month does not guarantee a repeat — the economy, rates, valuations and one-off events can override any pattern. Averages also hide dispersion: a good mean may stem from a few strong years, which is why the win rate sits alongside as a consistency measure. Sector Rotation is a descriptive analysis tool for orientation, not investment advice and not a buy or sell recommendation. Use it as additional context to your own research and risk assessment, not as a sole basis for decisions.

Frequently asked questions

Which sector is seasonally strongest in the current month? It depends on the month and is dynamic: the tool computes each sector ETF's average historical monthly return for the current calendar month and sorts them in descending order. The rotation signal above shows the four historically strongest sectors, the Top-3 table the ranking for all twelve months. A strong past, however, is no guarantee of the future.

How is the seasonal sector return calculated? For each sector ETF the percentage change from the previous month's last close to the month's last close is taken per calendar month. This is averaged over all available years (at least five) within the selected window of 5 to 30 years. The win rate additionally shows in what share of years a month was positive.

Which sectors does Sector Rotation cover? The basis is the eleven SPDR Select Sector ETFs: XLK (Technology), XLF (Financials), XLE (Energy), XLV (Health Care), XLY (Consumer Discretionary), XLP (Consumer Staples), XLI (Industrials), XLB (Materials), XLU (Utilities), XLRE (Real Estate) and XLC (Communication Services). These are complemented by specialty ETFs such as SMH, XBI, GDX or XOP, for 23 US sector and industry ETFs in total.