by Martin Williams

Exchange Traded Funds (ETFs) now cover almost every possible market sector - from industrial sectors to country and regional sectors. Such breadth of choice allows for the creation of ETF rotation strategies that should allow an investor to get greater return by moving to the “hot” sectors no matter what the current market conditions are.

Broad Market ETFs

The first ETFs that were introduced in the early 1990s track major market indexes such as the Dow Jones Industrial Index and the S&P 500. Other examples exist, such as QQQQ, which attempts to match the performance of the NASDAQ 100 Index. The NASDAQ 100 index is particularly volatile for a broad index because if includes a high portion of technology stocks.

Sector ETFs

Such ETFs as OIL (oil), GLD (gold) and SHY (short term bonds), allow a system to be developed that seeks to find which narrow market segment is likely to outperform in the near term and to move the assets in the system into such narrow segment until a better candidate is found. These ETFs provide some of the benefits of diversification that ETFs generally enjoy, while allowing some of the volatility that investing in narrow segments can enjoy also. These ETFs are specific enough to ensure that at least some of the market segments will move up no matter what phase of the economic cycle the economy is in. Thus, sector rotation strategies that can give great returns are now possible without investing in individual stocks.

ETF rotation strategies must be nimble to move into the correct sector at the right time.

ETFs that Cover Specific Countries or Regions

The last type of ETF that is useful for creating sector rotation strategies are the country or region specific ETFs. These country specific ETFs allow the investor to devise a rotation strategy that moves into the “hot” region and then out again when another region is poised to outperform.

Exchange Traded Fund Timing and Rotation Strategies - provide vast opportunities for great return for the aggressive investor.

With all the exchange traded fund possibilities for the creative investor to look to - there never has been a better time to use ETFs to devise market outperforming rotation strategies.

About the Author:
Information provided by a key principal in the creation of mechanical timing systems for the one of the longest running authorities in timing systems, Timing-Signals.Com,, providing market timing and investment information for exchange traded funds (ETFs) and the federal employees TSP at Exchange Traded Fund Timing