Monthly ETF Momentum Trading Strategy | Best ETF Trading Strategy | Best ETFS To Invest in 2026

Summary

The presenter outlines a monthly ETF momentum-rotation strategy intended to follow sectors and assets with recent strength. The strategy uses a spreadsheet to rank ETFs by their trailing three-month returns and rebalances monthly.

The presenter says the approach can capture sector trends while reducing company-specific risk compared with buying individual stocks. However, it can still incur losses.

Strategy Framework

• At the start of each month—suggested dates are the 1st to 3rd—rank ETFs by their 90-day returns, from highest to lowest.
• Select three ETFs from different sectors or asset groups and divide the investment equally among them. For example:
  • With ₹1 lakh, invest about ₹33,000 in each ETF.
  • With ₹5 lakh, invest about ₹1.66 lakh in each ETF.
• Review the rankings monthly:
  • Keep a holding while it remains in the top five.
  • If it falls outside the top five, sell it regardless of whether the position is profitable or at a loss.
  • Replace it with a new ETF from the top three, avoiding duplicate sectors or assets among the three holdings.
• The presenter gives an additional, somewhat unclear example of using different exit thresholds when one asset dominates the rankings: an ETF originally ranked #2 might be sold at #7, one ranked #9 at #13–14, and one ranked #18 at roughly #21–23. These examples are not fully consistent with the simpler top-five rule.
• This is not a permanent buy-and-hold approach. The idea is to hold while momentum persists and rotate out when relative performance weakens.

Market and Sector Context

The presenter describes capital as moving between sectors as economic conditions change, rather than being distributed evenly. Examples include:

• Pharma: Said to have outperformed during COVID, then slowed after the pandemic.
• IT: Associated with the digital boom.
• Banks: Said to perform well when interest rates rise.
• Public-sector banks: Linked to increased government spending.
• Small caps: Linked to periods of abundant market liquidity.
• Auto: Linked to reviving demand.
• Defence and energy: Described as strong in the presenter’s current-market example.

These are broad illustrations, not forecasts or verified performance comparisons.

ETFs, Stocks and Instruments Mentioned

• Silver ETFs: HDFC Silver, Silver BeES, and E-Silver (names as transcribed).
• Gold ETF: A generic example.
• PSU Bank ETF: “PSU Bank 20” (name as transcribed).
• IT ETF: “ITB” is used as a hypothetical label and is not clearly identified as a specific listed fund.
• Sector references: Pharma, IT, auto, chemicals, banking and PSU banks, small caps, defence, and energy.
• Stocks mentioned as examples: Infosys and TCS.
• Nifty: The presenter says it took 14 months to break its all-time high; the period is not specified more precisely.

Performance Claims, Numbers and Costs

• The presenter claims historical data for the strategy indicates 20–25% annualized CAGR. The video subtitles provide no calculation period, underlying dataset, or independent verification.
• The presenter says Nifty took 14 months to make a new all-time high and argues that sector momentum could still offer opportunities during a sideways market.
• Gold and silver are cited as assets that had been strong over the preceding year.
• A screen example mentions a 4.84% return and a target transcribed as “78%.” The wording is unclear and appears to refer to a prior ETF strategy, so it is not a reliable performance figure for this strategy.
• The presenter promotes Dhan and claims ETF delivery trades have zero brokerage, while noting that government or other statutory charges still apply.

Cautions and Disclosures

• The presenter acknowledges that the strategy may realize small losses when holdings drop out of the rankings. Returns are not guaranteed, and the claimed CAGR should not be treated as a forecast.
• ETF diversification may reduce exposure to an individual company, but it does not eliminate sector, market, liquidity, or other investment risks.
• The presenter says the video is for educational purposes, is not financial advice, and advises viewers to do their own research and trade at their own risk. The presenter also says they are not a SEBI-registered adviser.

Presenters and Sources

• Presenter/channel: Mack, Markets With Mack.
• Materials and sources referenced: The channel’s ETF-tracking Google Sheet, its Telegram channel, and Dhan, which is promoted as a brokerage platform.