During the month of February, U.S. equities did the unusual — they rose in price. Since WWII, the S&P 500 recorded its second-worst average performance in February, observes analyst Sam Stovall in CFRA Research's The Outlook.

Only September racked up a weaker average return. This year, however, the S&P 500 was up 3.0%, while its mid- and small-cap siblings were each higher by more than 4%. In addition, all 11 sectors in the S&P Composite 1500 had risen on the month, led by industrials, tech and utilities.

Finally, 77% of the S&P 1500's 146 sub-industries were in the black with consumer electronics, computer & electronics retail and personal products recording the greatest gains. While a positive return in February is nice, there's more to the story.

There have been 28 times since 1945 in which the S&P 500 was up in both January and then again in February. In all 28 times, the S&P 500 recorded an average 24% full-year total return. Also, not all of the gains were experienced early in the year. In 93% of those years, the market was higher 10 months later, averaging 13.4%.

The indicator was wrong on a 10-month basis only in 1987 and 2011. With equities on a tear so early in 2019, it should come as no surprise that cyclical sectors and momentum groups have outperformed the overall market.

The four CFRA-Stovall Seasonal Rotation Custom Indices, which hold the cyclical consumer discretionary, industrials, materials and tech sectors from November through April, and then rotates into the defensive consumer staples and health care groups from May through October, all outpaced their benchmarks on a month-to-date and year-to-date basis through February 28.

These four strategies' returns were on top of the market-beating results of 2018 and add to the magnitude and frequency of outpacing their broader indices since 1990 with lower overall volatility. Please visit www.PacerETFs.com to learn about the Pacer CFRA-Stovall Equal Weight Seasonal Rotation ETF (SZNE).

Within the S&P Equal Weight 500, the consumer discretionary and information technology sectors outpaced the market during February, while the industrials and materials groups were under-performers. Year to date, the consumer discretionary, industrials and tech sectors beat the market, while materials lagged.

So there you have it. Will 2019 see the continuation of a previously unerring indicator? We think the chances are good and suggest investors consider surfing the seasonality wave or maintaining a watchful eye on momentum to see which groups and stocks will win out in the year ahead.

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