This accelerated approach has generated 3.5% annualized alpha
This accelerated approach has generated 3.5% annualized alpha: Sevens Report Analysts Quoted in Investing.com
Analyst explains 2 sector rotation strategies with proven outperformance
According to Sevens, this accelerated approach has generated 3.5% annualized alpha versus the S&P 500.
The second strategy called the Cheapskate Sector Strategy, involves buying the sector with the lowest price-to-earnings ratio from the previous year.
Sevens notes that the contrarian approach, while more psychologically challenging, has historically paid off, delivering an annualized return of 12.6% over 34 years. It has outperformed the S&P 500 in 20 of those years, with a 59% win rate. For 2025, Energy is the cheapest sector in the S&P 500 based on trailing P/E.
Sevens Report notes that while these strategies don’t work every year, their long-term success rates exceed those of most active managers.
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