State Street US Sector Rotation ETF

XLSR

Market cap $990M

Sector investing — it's a typical strategy for advisors if their clients are looking beyond broad market exposure by targeting a specific sector. The concept is fairly straightforward, but implementing the strategy is not as simple as it sounds.

State Street® US Sector Rotation ETF is an actively managed ETF utilizing a proprietary model to rotate between sectors of the S&P 500. The lion's share of its net assets is allocated to ETFs, but it holds common stocks too. Despite its promising strategy, XLSR has significantly underperformed IVV since inception. Risk-adjusted returns over May 2019–December 2025 were not appealing either.

Macro conditions remain a bit of a mixed bag. In the past week alone, the latest read on inflation surprised to the downside, while unemployment figures beat estimates to the upside.

Even with $2.4 trillion in ETF assets spread across more than 400 ETFs, there's a pending offering from BlackRock that caught my eye. Before I lose you, dear reader, I'm not talking about the hopefully soon-to-be-approved iShares Bitcoin Trust.