Learn · Research notes
Why sector and country rotation failed against the S&P 500
Country momentum and Select Sector SPDR overlays looked interesting in sample. Walk-forward, costs, and rolling TWR killed them as a SteadyGrow return feature.
Direct answer
Trying to beat SPY with slices of the same equity market failed our product bar. Full-sample wealth wins often vanished in later windows or under realistic costs.
The hypothesis
Sectors and countries sometimes lead. Maybe a 12-month momentum + trend rule can overweight the leader and beat 100% S&P 500 DCA on the same paycheck.
What we ran
Phases 2–4 covered:
- Country cross-sectional momentum vs SPY
- Contribution-only sector books (never sell)
- Full sector rotation and 80/20 SPY-core overlays
- Economic gates (turn the sleeve off in “bad” markets, vol sizing, leader gaps)
The overnight Phase 4 wake-up report is blunt: ship 100% SPY (or a static named mix). Nothing was ready as a SteadyGrow return feature.
Why the charts lied sometimes
- Wealth without TWR. A sleeve can finish richer because of when contributions landed, while deposit-stripped TWR is flat or negative.
- Walk-forward collapse. Rules that looked spectacular in-sample (one hot sector) lost badly in 2021–2026.
- Rolling hit rates under 50%. Even structurally “real” sleeves (better than random placebos) still lost most three-year windows vs SPY on TWR.
Product sentence that survived
> SteadyGrow invests attention in understanding historical habits — not in outsmarting the S&P 500 with sector timing.
Use the S&P 500 DCA calculator. If you want concentration, pick it as a preference (for example more tech), not because “the model found alpha.”
Frequently asked questions
- Why sector and country rotation failed against the S&P 500?
- Trying to beat SPY with slices of the same equity market failed our product bar. Full-sample wealth wins often vanished in later windows or under realistic costs.
- Do you sell a trading strategy based on this research?
- No. These pages document what we tested and why we do not sell a paid allocator. Use the free S&P 500 DCA calculators instead.
Run the numbers on real history
Guides are cheap. Seeing a monthly habit on published S&P 500 prices is the point.