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Financial markets

Seasonal Rotation ETF: A Bullish Outlook on Markets Amid Historical Trends

Strategic Insights

— 1 min read

Brooke Thackray, lead strategist for Global X Seasonal Rotation ETF, is optimistic about the markets over the next six months, driven by historical trends and seasonal patterns. According to Thackray, the year's performance has been an exception to the typical six-month period where the stock market tends to underperform. He notes that this year's markets have soared since their plunge in April, after initial tariff announcements by U.S. President Donald Trump were negotiated lower for key economic countries.

Key Takeaways:

  • Thackray's seasonal strategy is based on historical market trends and is a long-term discipline that may not work perfectly every year, but is essential to maintaining a plan.
  • Government bonds tend to do well from May to early October, while precious metals tend to outperform between July and early October, both of which happened this year.
  • Global X Seasonal Rotation ETF has returned 6% year-to-date as of October 29, with a one-year return of 4.4%, a three-year annualized return of 11.5%, and a five-year annualized return of 12.5%.
  • Thackray likes the Global X Uranium Index ETF due to the supply deficit expected in the uranium sector, driven by increased demand for nuclear power, especially as artificial intelligence adoption grows.
  • The S&P 500 Industrial Sector SPDR and S&P 500 Materials Sector SPDR are also favored due to the expected performance of the industrial and materials sectors, respectively.
  • Thackray sold the Global X Gold Producer Index ETF due to the seasonal perspective, which shows the gold sector stumbles in late September.

Statistics:

  • Global X Seasonal Rotation ETF: 6% year-to-date return as of October 29; 4.4% one-year return; 11.5% three-year annualized return; 12.5% five-year annualized return.
  • Uranium sector: expected supply deficit amid increased demand for nuclear power, driven by artificial intelligence adoption.
  • S&P 500 Industrial Sector SPDR: top holdings include GE Aerospace, Caterpillar Inc., and RTX Corp.
  • S&P 500 Materials Sector SPDR: top holdings include Linde PLC, Newmont Corp., and Sherwin–Williams Co.

Sources:

  • "Time to buy this rotation ETF, says strategist - again" by Brooke Thackray on [Source not explicitly provided, but linked at globeandmail.com].

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