Sector ETFs || Long-Term || Equity Investing || Sector Rotation
This is the first investing algo in our spotlight series — different from the F&O trading algos we’ve covered so far. No daily trades, no options, no expiry stress. This one works like a smart, automated mutual fund that rotates into the right sectors at the right time.
What is it?
Every year, different sectors of the Indian economy take turns leading the market. In 2021 it was IT. In 2022–23 it was banking and PSU. In 2024 it was infra and capital goods. No single sector leads forever — and most investors are either stuck in yesterday’s winners or constantly chasing the next one manually.
Alpha Industries Automated solves this by systematically identifying which sectors have the strongest combination of fundamental strength and price momentum — and automatically rotating your capital into sector ETFs that represent those sectors. You don’t pick stocks. You don’t time the market. The algo does the rotation for you.
Why ETFs — not stocks?
This is an important distinction. Most algo investing strategies pick individual stocks — which means concentration risk. One bad earnings call, one management issue, one accounting scandal and your position bleeds.
Alpha Industries buys sector ETFs — not individual stocks. When it rotates into banking, you get exposure to the entire banking sector through a single instrument. When it rotates into infra, you’re holding the basket, not betting on one company.
How does the rotation logic work?
The algo combines two filters before rotating into any sector:
Both filters need to align before a rotation happens. Fundamentals without momentum means the market hasn’t seen it yet. Momentum without fundamentals is just a crowded trade. The algo waits for both.
How does rebalancing work?
This is where Alpha Industries is different from most algo strategies. There’s no fixed rebalancing calendar — no “first Monday of every quarter” mechanical swap. The algo holds ~5–6 sector ETFs at a time and only rotates when the conditions actually warrant it.
Typical holding period — ~6 months, but signal-driven
In practice, positions tend to be held for around 6 months — but this isn’t a rule, it’s an outcome. If a sector’s fundamentals deteriorate or momentum reverses meaningfully, the algo acts. If the sector is still running, it holds. No forced churn, no unnecessary tax events.
Think of it like a fund manager who has no obligation to trade on a specific date — they trade when the evidence says to, not when the calendar says to.
Real world analogy: Imagine a smart investor in 2020 who moved into pharma when COVID hit, rotated into IT in 2021, shifted to PSU/banking in 2022, and moved to infra/capex in 2024. Each rotation was driven by a changing economic story — not a fixed date. Alpha Industries automates exactly this behaviour.
The tool behind the rotation - Relative Rotation Graph (RRG)
Each sector occupies one of four quadrants based on its relative strength vs the benchmark and the direction of its momentum. The algo targets sectors in the Leading quadrant — strong fundamentals already confirmed by strong price momentum.
How the rotation works
Sectors rotate clockwise through the quadrants over time — from Improving → Leading → Weakening → Lagging → back to Improving. Alpha Industries enters when a sector is in Leading, and exits as it rotates into Weakening.
How it fits in your overall portfolio
The previous spotlights — Damper, Fixed RR, Zen — are all F&O trading algos. They’re active, daily, and tied to market sessions. Alpha Industries is the opposite: patient, long-term, equity-based.
If you already have F&O algos running — Alpha Industries is your long-term wealth-building layer running in parallel, uncorrelated to your daily trading P&L
If you’re not ready for F&O yet — Alpha Industries is the cleanest starting point. ₹35,000 min, equity only, no options, no daily monitoring needed
Recall the WorldQuant principle from the cheat sheet — uncorrelated strategies. A long-term equity rotating algo is as uncorrelated from a short strangle as you can get
Who is this for?
Anyone who wants equity market participation without stock-picking stress, who believes sectors rotate but doesn’t want to manually track which one is leading, and who wants a long-term compounding layer running alongside their trading algos. Starting at just ₹35,000, it’s also the most accessible algo in the Stratzy suite for someone building their first automated portfolio.
Available on Stratzy. Unlike the F&O algos, this one doesn’t need daily check-ins. Deploy it, let it run, and check back when the algo flags a rotation. That’s the whole experience.
Are you currently running a long-term equity algo alongside your F&O strategies? What’s your current sector view — which industry do you think leads the next 6 months? Drop it below 