SECTOR RESEARCH // CLASSIFIED F-916

Sector Rotation & Macro ETF Flows

Institutional capital migration patterns, momentum regimes, and cross-asset correlation models.

Sector Capital Inflow Velocity Matrix (10-Day Momentum)

Energy (Cyclical)(XLE)

+8.4%

Financials (Cyclical)(XLF)

+6.2%

Technology (Growth)(XLK)

-4.5%

Utilities (Defensive)(XLU)

+0.8%

Healthcare (Defensive)(XLV)

-1.2%

Core Philosophy

Institutional capital is never static. Macro-economic interest rate movements and treasury yields curve shifts force capital to cycle. Mapping these institutional flows early allows AQS to capture multi-week relative strength trends before broad market adoption.

Target Assets

Sector SPDR ETFs (XLE, XLF, XLK, XLV, XLY)
US Treasury Curves & Fixed Income Funds
Broad Market Equity Index Futures
Factor baskets (Value vs. Growth)

Primary Data Sources

Federal Reserve FRED Database10Y-2Y Treasury spreads, yield curves, and inflation indices
EPFR Global Fund FlowsWeekly institutional cash allocations and net asset flows
Broad Market ETF volumesNet daily volume indicators and index components flows

Strategy & Execution

The Setup:

When the yield curve steepens and EPFR reports positive net inflows into cyclical sectors, execute a long allocation in Cyclical ETFs (XLF - Financials, XLE - Energy) funded by exiting Growth ETFs (XLK - Technology).

Risk Management:

Rebalance allocations dynamically based on a trailing 10-day VWAP window to avoid transaction churn.