--- title: 'Monthly ETF Momentum Rotation Strategy | Best ETFs for 2026' source: 'https://youtube.com/watch?v=TJg7qP93_9E' video_id: 'TJg7qP93_9E' date: 2026-07-31 duration_sec: 1658 --- # Monthly ETF Momentum Rotation Strategy | Best ETFs for 2026 > Source: [Monthly ETF Momentum Rotation Strategy | Best ETFs for 2026](https://youtube.com/watch?v=TJg7qP93_9E) ## Summary This video presents a monthly ETF momentum rotation strategy: invest equally in the top three sector ETFs based on trailing three-month returns, hold them as long as they remain in the top five, and rotate monthly. The creator explains sector rotation, why ETF rotation reduces risk, provides a tracking sheet, and expects 20-25% CAGR annually. ### Key Points - **Interest rates and bank performance** [00:01] — Banks and many ETFs perform well when interest rates rise, and these returns can often be captured in two to three months. - **Check 3-month ETF returns on the 1st** [00:41] — At the start of each month, review trailing three-month returns of sector ETFs. If gold falls outside the top five, exit gold regardless of profit or loss. - **Sector rotation and momentum** [03:37] — This strategy is momentum-based: invest in sectors with the best 3-6 month momentum by tracking where money is flowing. - **Money is not distributed equally** [04:04] — Big players concentrate capital in sectors that are undervalued or have strong growth potential, so capital rotates between sectors over time. - **Sector cycles examples** [05:35] — Pharma outperformed during Covid, IT boomed during the digital boom, banks do well when rates rise, PSU banks when government spending rises, small caps when liquidity is high, autos when demand revives. - **ETFs reduce single-stock risk** [06:42] — An ETF is a basket of all stocks in a sector. One weak company doesn't materially affect the ETF, giving built-in diversification. - **Monthly routine** [09:27] — When your salary arrives (around the 1st-3rd), check the ETF ranking sheet on the 1st, sort by last 3 months' returns, and invest equally in the top 3 ETFs. - **Ride momentum, exit when it fades** [11:35] — Best-performing ETFs carry momentum. The strategy is not buy-and-hold forever; exit when momentum ends (when the ETF drops out of the top five). - **Example with ₹5 lakh** [12:37] — On Jan 1, 2026, if top three are IT, Pharma and Gold, invest roughly ₹1.66 lakh in each. Next month, re-sort and check if your ETFs are still in the top five. - **Top-five holding rule** [13:47] — If a held ETF stays in the top five, keep it. If it falls outside the top five, exit it and replace it with the new top-three ETF. - **Zero brokerage with Dhan** [17:09] — Dhan broker offers ₹0 brokerage on ETF delivery trades, so you only pay government charges. This keeps monthly rotation cost-efficient. - **Avoid same-sector concentration** [19:37] — If top three are all same-sector ETFs (e.g., three silver ETFs), buy only one and pick the next best from different sectors to maintain diversification. - **Return expectation** [26:05] — Historical backtest suggests 20-25% CAGR; losses are small and winners are large. The strategy can still profit in sideways markets through sector rotation. ### Conclusion The Monthly ETF Momentum Rotation Strategy is a simple, rules-based approach: invest equally in the top three sector ETFs by trailing 3-month return, hold while they remain in the top five, and rotate monthly. With discipline and low-cost execution, the creator expects 20-25% CAGR while avoiding single-stock risk. ## Transcript When did the bank perform? When interest rates rise here, banks perform quite well. There are many such stocks , many such ETFs which give these returns very easily in two to three months. In today's video we have brought another ETF strategy. Which ETF to buy when, how to trade the strategy, when to exit, what will be the result expectation, what will be the return expectation? That there is no sector rotation in the market. If you lot of risk involved. So if you want to make money in the market, I will tell you the complete strategy. I am going to give you a complete sheet of ETFs of those sectors as to when you should invest in which ETF ? So you have to see the return data of ETF for the last three months in the first of the month. ? So you have to see the return data of ETF for the last three months in the first of the month. gold falls outside the top five, you will exit the gold. Whether there is profit or loss, it does not matter. Depending on the stage we are in, big players decide in which sector they should invest their money. Whatever sector's which are performing very well. As soon as selling starts in that sector, my rule is that automatically many people will have doubts that brother, what will be the return expectations in this strategy that you are telling ? I am not a Savvy Registered Advisor and this is not financial advice. own risk. So hello friends, welcome to the channel. Welcome all of you to another new amazing learning video. And in today's video learning video. And in today's video we have brought another ETF strategy which is the strategy of Again Monthly Income. And the name of this strategy is Monthly ETF Momentum Rotation Strategy. If you have not seen our previous ETF strategy video then because you people have given a lot of love, almost more than 1 lakh people have seen this ETF video here and many people are generating good monthly income by applying that ETF strategy here every day and many people are generating good monthly income by applying that ETF strategy here every day strategy is a little different from that and here our focus will be to capture the momentum and if you are interested in monthly income or if you want to make monthly income from the stock market, if you want to make consistent income, reliable income then if you watch this video completely then you will get all the clarity. I just want like the video right now. Leave a nice comment and share this video. And this video has a lot of moving parts. I am going to make everything easy for you. We will parts. I am going to make everything easy for you. We will please do not rush to watch the video. Please watch the full video. You should make notes so that you get complete clarity. If you are ready then like the video right now and subscribe to the channel. Let's start the video without any delay. What are we going to cover in today's video? In today's video we are going to talk Bhaiya how sector rotation works along with money flow. First of all, this strategy of ours, we will make it on the basis of momentum here, that brother, in the last 3 months, 6 months, whichever sector has very good momentum, we are going to invest our money in that sector. What will the rules be? I will talk about how many ETFs to buy, when to exit, how much return to book. But before that you will have to understand that there is no sector rotation in the market. So how does sector rotation work? How does money flow in those sectors? We will talk about that. After that we will talk about ? Why does ETF rotation work so well ? If you invest directly in stocks, there are a lot of risks involved. But if you work in ETF rotation then your risks get mitigated to a great extent. Then we will talk about the Monthly ETF Momentum Strategy. What is this Monthly ETF Momentum Strategy? Which ETF to buy? Which ETF to sell? I will explain everything to you on screen with proper examples so that you get complete clarity. You just have to watch the video completely. And then I am going to tell you the exit rule and also share the complete result expectation with you. First of all let's Works. Look, you have to understand that there are many sectors in our market. There is IT, pharma, auto, and many chemicals. Meaning, if you sit down to calculate, there are many sectors. The truth in the end market is that the money in the market is not distributed equally across all sectors. If we take an example, if there is ₹100, then investors have to invest ₹100 in the entire market. So it is not that if there are 10 sectors, then big players will invest ₹10 each in these 10 sectors. What will he do? Out of this ₹1 to ₹100, maybe ₹20 to ₹30 can be invested in a sector which they feel is undervalued, in which they see good growth and in which they feel that there is a good opportunity in the coming two to three years. So you have to understand that the money in the market gets rotated in those sectors. If I tell you further which sectors have run and when, which sectors can run in future and how can you take advantage of it. You will get some clarity in that as we will strong at different points. As the economic cycle changes, capital keeps As our economic cycle changes, capital changes here from one cycle to another. When the interest rate is low, some other sector works. When the interest rate increases, the money goes to some other sector. So invest in all sectors, then you diversify. But if you invest in the sector in which big players are already investing, then you can generate alpha returns somewhere. And the only purpose of this channel Market with Mac is to help you build an edge so that you can make good returns in trading and investing here. Right? So if you notice sectors were running at different times and here some clarity. First of all, if you note, the pharma sector had outperformed during the time of Covid, that is, during the time of Covid, whoever invested in pharma would have made a soon as Covid ended, then if you would have invested in pharma, then a slowdown was seen in the pharma sector, returns were not made, so if you are investing in the sector at the right time, then you will make a lot of money, then when did IT perform, when the digital boom came, IT gave very good returns, rates increase here, then the banks do very well. When do public sector banks spending increases here. When do small caps outperform? When there is a lot of liquidity in the market here. When do the auto sector outperform ? When demand revives. That is, decide in which sector they should invest their money. I hope you got this clarity here. Right? Now what do we talk about? Now let's talk about why ETF rotation works. Because see, the most important thing is that if you invest directly in stocks. Ok? You invest directly in stocks. The first thing you need to do is read about the company. Isn't it ? After that, suppose you invested in the company. The company may be deceiving. The company may close down. Meaning your money can also become zero. Your investment may also flop. Ok? But when you invest in an ETF, that ETF means basket. And this basket contains all the stocks that are in their sector. Suppose we are buying an IT ETF. Ok? Suppose we name the ETF of IT as ITB. So if you are buying ITB, you are not buying just one company. You are not buying shares of Infosys or TCS. You are purchasing shares of all the IT companies in ITB in this manner. So, even if one company does not perform well, it will not make any difference to your ETF. So somewhere or the other, diversification takes place. And it is not that if diversification happens then your returns get affected. Your returns don't take a hit at all. So let's talk about how the returns don't hit. The risk is already cut down because you are not directly investing in a stock. Each sector ETF only includes the best performing stocks of that sector. Whatever ETFs there are, whatever sector ETFs there are, performing very well. So your risk reduces a lot. you have to understand that no sector can be zero. No sector can be destroyed. The time for the sector comes. And this strategy that I am going to tell you will strategy that I am going to tell you will times, the stocks of defence and energy sectors are you will make you invest in the same sector. You will bet solely on the sector where the invest in the same sector. You will bet solely on the sector where the sector which will see good return growth in the next one to two years tell you the complete strategy. I am going to give you a complete sheet of sector ETFs as to when you should invest in which ETF ? What should one look for before investing ? When you buy and sell ETF regularly, you will incur huge charges. ? Who is the best broker for that? We will talk about everything. But before that you have one task because many people commented on the last video, many people subscribed, many people shared it. So that video reached many people. Many people are taking advantage of it. I want you to share this video right now with one or two of your friends. Share them because this strategy is completely new to the stock market. And with this strategy he can start his investing share the video and like it. And tell me in the comment whether you shared it or not. And there are many people who subscribe to the channel but do if you haven't pressed it yet, do one thing, press the All button on the bell icon right now. Right? Now let's talk about what needs to be done in this strategy? It is a very simple strategy. When your salary comes, it comes almost on the first, second or third of the month. So I would ask you what you have to do on the first of every month? I am going to give you the complete PDF sheet of the last three months. I will tell you that too. Right? So you have to see the return data of ETF for the last three months in the first of the month. you have to see the return data of ETF for the last three months in the first of the month. Invest in the top three ETFs. Meaning I'm going to share the sheet with you right now. What do you need to do in that sheet? You have to check the returns of last three months. ETFs will be here and last 3 months returns will be here. Now you have to returns will be here. Now you have to sort it here in descending order. That means the one which gives the highest return will be at the first position , less than that at the second position, less than that at the third position and the one which gives the lowest return will be at the last position. What do you have to do? You have to invest your money equally in the top three ETFs. Ok? Now you have to decide what your capital is going to be. In the previous ETF strategy that I shared with you for monthly income, you had to buy ETF every day and that game was different. Here you have to buy ETF every month, not every day. ETFs have to be sorted every month. And your holding in this is going to be a little longer. Right? So you will buy the top three TETFs here. You decide the capital. If you are investing ₹1 lakh, how much will you invest in the top three ETFs? 33,000 in first ATF 33,000 in second 33,000 in third simple. You have to do this. Just do this and nothing else. Well, it's that simple and I'll tell you. Ok? This is simple. no guesswork. I told you a very simple method. Why are we buying the top three ETFs now ? We are investing in the ETFs which have the highest returns in the last three months. many people will say, are you mad? are you idiot? These ETFs are already operational. They have already returned. When we have already run away then But you have to understand that there is a concept of momentum. And the market, sectors , stocks, ETFs respect momentum a lot. So I am not saying that you should buy it and hold it for the rest of your life. I am saying best performing ETFs in the last three months. Brother, he has momentum inside him. When they have momentum, we get on that train. we will exit that train. The train will be debotted. So this is not a permanent investment here. Here this is an investment as long as that sector continues. As soon as selling starts coming in that sector. My rule is that I will you get the clarity that we are trying to capture the momentum here. Right? Now what do you have to do here? Now Rotation Monthly Rotation Rule. Listen to the monthly rotation rule to know how you have to exit and how you have to rotate. Now let's say it's how you have to rotate. Now let's say it's January 1st, January 1st, 2026, okay? It is 1st January 2026. Here you have it sorted. I'll also tell you how to sort. brother will tell you everything how to do it. Right? So you have picked out three ETFs here which have given the highest returns. The first ETF is IT. The second ETF is Pharma. I am giving an example. The third ETF is your gold. Ok? What did you do in these three ? Let's suppose I have to deposit ₹5 lakh here. ₹5 lakh have to be deposited. So what should I ₹5 lakh have to be deposited. So what should I do? 1.33 1.33 1.33 1.33 It won't happen, friend. It will be do? 1.33 1.33 1.33 1.33 It won't happen, friend. It will be more than this. Will be 1.66. Will be 1.66. Ok? There was a slight mistake in calculation. Sorry for that. People climb up Sorry for that. People climb up otherwise. Ok? So otherwise. Ok? So Ok? You have to put money into it. Now when the month of Feb comes, Feb 2026 comes, then what should you do? You have to look at that sheet again and in that sheet again you have to sort the sheet according to last three months in descending order. All you have to do is see whether the three ETFs you have bought are in the top five? Not top three, is it within the top five? If it is in the top five then you don't have to tinker with anything. If they fall outside the top five. Suppose everyone comes out and everyone has to exit. Suppose if Gold comes outside the top five then you will exit Gold. Whether there is profit or loss, it does not matter. Because here you may have to book small losses. But when you hold, you will create force returns. Let's say your gold doesn't come in the top five. Gold goes directly from your third number to your eighth or ninth number. Like he goes to number eight and nine. You will exit the gold. You should hold IT and Pharma as they are in the top five. And what would you replace gold with? The one who comes at third place or the one who comes in the top three. Whoever comes within the top three is a new entry. What will we do in it ? We will put our money into it. We will invest as much money as we have withdrawn from gold in that sector. Will put it in that ETF. And what will we do like this? We will rotate every month. So the ETFs that will be in our portfolio will always be three. So we can increase the investment. It is not necessary to invest only Rs 1 lakh. Whatever you want to invest, you can invest it big. But you only need to hold three ETFs at a time. And you will continue to hold these three ETFs as long as they are in the top five every month. When, for example, it remains in the top five for 2 months, 3 months, 4 months, 5 months, 6 months, then you should keep holding it. There is no need to buy a new ETF. As it sales have started in it. He has already given whatever returns he had to give. As soon as it comes out of the top five, you will exit that particular ETF and What do you see inside it ? In which we are seeing fresh momentum. Because momentum is key. You understand it yourself. Many times what happens is that we talk about long term here that brother, if you get a return of 20% in one year in the long term, then brother, you are an investor. This is true but you must have also noticed that there are many such stocks, many such ETFs which give these returns very easily in two to three months, in two to three weeks, so what you have to do is you just have to catch the momentum, ride the momentum and as soon as the momentum ends, you have to leave that train, how did you like the strategy, please I noticed one thing that many people changes and they will copy it. There is no problem. Everyone is free to copy. I just want this concept to reach the majority of people so that they can take advantage of it here. So what is the rotation policy? So what is the rotation policy? Until the ETFs we bought last month remain in the thing. As long as he's in the top five, we'll hold him. As soon as it goes out of the top five, we will exit that ETF and replace it with the ETF which is in the top three which I have explained to you here. Ok? What is there now? You will buy ETF every month. You will buy three ETFs every month. Will you buy three ETFs? Maybe sell three ETFs. Isn't it? So your buying and selling of ETF will increase. And see, when you buy and sell ETFs, the biggest charge as a brokerage. I am going to tell you about a broker where if you take delivery of ETF, your brokerage charge will be zero. You don't need to pay a single rupee. Yes, there are government charges which you will have to pay wherever you go, but your broker will not charge even ₹1 from you. And which broker is that? That broker brother is your money. So what can you do through money ? You can work in ETF. In our last strategy video, Monthly Income ETF Strategy video, we are buying and selling ETFs every day. trade with a normal broker, Same case is here also. If in this strategy that I am telling you, there will be buying and selling, if you make any profit, then you may have to pay a good brokerage. But if you use this ETF strategy through money, then your brokerage in the delivery of ETF will be absolutely zero. It is going to be absolutely free. That means you do not have to pay anything from your pocket. So what do you do? You So what do you do? You You can open your free demat account through it. You can start your journey of investing, trading, ETF buying etc. in End Dhan. What do we do now? Now let us simply go to the charts. I will tell you how you can download that complete ETF tracking sheet. How to sort you out. How will you find out brother which ETF you want to buy? What we want to you can apply the complete strategy. So without wasting any time, let's go to the screen and understand everything in detail. Ok. So now we're here on the screen. First of all, you will where you will find the list of all the ETFs. Ok? You will get all these ETFs and if you look here, you will get their live price and it will be updated every 5 minutes. It will be updated every 2 minutes. not updating. Then a change of 1 day is a change of 90 days, right? And if you come here on the side, what will you see here ? Here you will see the rules etc. Buying and selling instructions. And below you will find the link for opening a demat account of Dhan. Simply by clicking on this you can open your demat account and start your ETF investment. And you can also join our Telegram channel by clicking here. Where I will share updates on whatever Now look, it is very easy to flatter ETS. You have to come on 90 days. First of all, this sheet that you will get is not editable. So, you can make a copy of it by clicking on File. What can you do after making a copy can sort this. What will you do after making the copy? Sort it here. Sort the sheet from Z to A in descending order. Ok? Now What did I say brother? We will buy the top three ETs. First is HDFC Silver, second is Silver Beast, third is E Silver. Now brother, all three are silver. That means they belong to the same sector. So obviously what do we need? If we are buying three ETFs, we will buy three different sectors. So the top three ETFs that we have are basically ETFs of the same asset. So what will we do buy any one of the three. We bought HDFC Silver. After that, apart from silver, the next ETF which is at second place is our gold. We will say goodbye to him. And the third one which is ours is PSU Bank 20. If I come down here, You will get to see gold here. The first silver is ours. Gold will buy itself. And if you check the third number , it is our PSU Bank 20. So, we're going to buy a silver ETF here. One will buy a gold ETF and One will buy a gold ETF and one will buy a PSU bank ETF of twenty. Ok? It's a simple thing. Now here you just have to see that the interesting thing is here. What I told you was that you have to buy the one that is in the top three. And as soon as this ETF goes out of the top five, you will exit it. But here we bought the ETF number 18. Because brother, literally if you check, all the other ETFs are of the same asset. Belongs to the same asset. So this ETF we found at number 18. So just mark its numbering, suppose you are buying HDFC Silver here, then what is its numbering? Its numbering here is number two. Ok? After that you are here you are buying the ATA of Gold share, it is at number nine. So you bought number two, the silver one. The one with gold bought number nine. And here at what price did you buy the PSU bank? The one related to your PSU bank is at number 18. It is at number 18. Ok? So you just have to make sure that you grab this one, you grab this two, you grab this three. Ok? So if this belongs to two, where does it go to you? It goes to the sixth or seventh position. The one with number two goes to sixth or seventh position the next month. That means if it goes out of the top five then you will exit it. Or if the ninth one which you have goes out of the 13th or 14th position next month then you will exit it. And if this 18th one goes outside your 2 or 23 position then you will exit it. As long as it is moving at or above its position it is very good. You can hold it comfortably. And right now the situation is such that there is a bit of euphoria where silver and gold are running like crazy in one place. But in normal market conditions, you will see that in the last 3 months you will notice that you will get different ETS of different sectors. So you can make it to the top three in that. But what we just said is that if you assume that in the top three, Silver A, Silver 20, E, Silver, buy all three of them are the same, then it means that your diversification will not happen, hence here you have to invest in the top three different sector month you just have to check and mark its numbering, normally the numbering will be one to three, so if it goes out of the top five then you can remove it, but if the numbering is a little crooked like this, where the first top 10 ETFs are all from the same sector, then and if it goes out of the top five. For that, you have to randomly mean basically assume what is our top three ? 1 2 3 right? And we are saying that if this brother reaches sixth position then we will exit him. If this brother goes to sixth position then we will exit. Ok ? That means basically here five steps from here , four steps from here and three steps from here. Ok? So right now if we have to buy silver then it is at second place for us. The gold that you want to buy is at number nine. And the PSU bank we have to buy is on 18th November. So from here, five steps means if this number two person comes at number seven, we will exit. If the ninth number comes on 13th November then it will be exited. And if the 18th one comes here at number 21, then we will exit it. Just remember this and your work will be done. Right? So what do you simply have to do with these three ETFs ? You have to invest here. And if you notice our previous ETF trading strategy video, simply go to our YouTube channel Markets vs Mac and come down, here you will see that almost 1100 people have seen the Monthly Income ETF Trading Strategy not that only these people are watching it, the person who is making the video is also investing his money. If you check my ETF portfolio, here we have invested money in almost four ETFs. Right? Our money is invested here in four ETFs. If you can go to the portfolio here and check it out in ETF. Right? So we are buying ETFs properly according to the method that I have shared. End Returns An ETF in front of you already gave a return of 4.84%. Our target is around 78%. can go here and check out this video. that if you are buying ETF and taking it on delivery then your brokerage is zero and if you do it through any broker then buy and sell will cost ₹20 or ₹40, hit a lot. Even if you do this with small capital, you can achieve profitability because your broker is supporting you. If you have any other doubts, please let me know in the comment section. I have shared the link of this sheet And the sheet may not be editable, so please be careful while making a copy of it. And stay tuned for timely updates on which ATFs I'm buying. can join our Telegram channel. You will find the link here in the sheet. The description box will be found in the comment section. Thank you. So I hope you have got complete ? You will find the link to the sheet in the description box comment section. so you can do what? If you want to edit something, you can edit it. You have to sort it so that you can sort it. Now many people will have doubt that brother, what will be the return expectation in this strategy that you are telling? Because look here you will have to understand that many times we are going to book losses also because when we bought our ETF which was in the top three and suppose the next month it came below the top three then it did not give us returns, then we will book losses there also but your losses will always be small and your winners will always be big. And it's not like you have to do anything. You just have to follow the rules. I have made everything entry exit rule based. If you follow the rules, you can make huge profits. There is no problem in that. So, according to the historical data, whatever capital you invest in this complete strategy, you can get 20 to 25% CAGR annual returns. Sometimes you can withdraw a lot and sometimes you can withdraw less but you can withdraw 20 to 25% annual CGR. And the good thing is that when the market is completely sideways, when the market is not giving any returns at all. For example, in the last one year, the market did took 14 months to break the all-time high. Investors did not make any money in those 14 months. ETF strategy, then even in those 14 months, there is some sector which has given good returns. If you had followed this strategy and ridden that sector, you too would have made good money. Gold and silver have been in great demand in the last one year. So, in this ETF criteria, gold and silver had entered long ago. So if you invest in it, if you put money in it, you would capture a very good move. Rest yes, I am going to apply this strategy here myself and when will I buy which ETF, when will I sell which ETF, how is my rotation going to happen, I will share updates of all these things on my free Telegram channel, so the link of our free Telegram channel is the original link, it will be available in the description box comment section, you can join it here and tell me in the comment section how you liked this complete video, definitely tell me in the comment section, I will read everyone's comments here and I am also going to reply to the top 20 comments. So the sooner you comment, the higher the chances are that I will personally reply to your comment. If you haven't seen the old ETF video, you can check it here. section. I will meet you in the next video. Till then stay safe. Have a nice in the next video. Till then stay safe. Have a nice day. Love you all.