Since August, the intensity of industry rotation has been climbing, now sitting near its highest level this year. The faster this rotation spins, the shorter the window investors have to make decisions and reposition. Tech momentum barely lasts two days before fading; electronics, telecom, manufacturing, consumer staples, and cyclicals take turns leading—last week's top performer can easily become this week's laggard. Interestingly, while capital switches rapidly between sector themes, broad-based indices are absorbing net inflows—for example, ETFs tracking the CSI A500 Index like A500ETF易方达 (159361) have drawn in over 14 billion yuan in net inflows over the past month as of August 25. At a time when the market lacks fresh capital and existing funds are simply shuffling between sectors, where the money ultimately lands is itself a signal. So here's the question: with sector rotation accelerating, why does buying a basket of sectors to cover all hotspots fail to generate profits? And why are hotspots becoming increasingly difficult to chase?

Why are hotspots getting harder to chase?

Since August, the pace of industry rotation has clearly accelerated—measured by the absolute changes in sector return rankings, rotation intensity has steadily risen to one of the highest levels of the year. Several factors are driving this acceleration: rising uncertainty in overseas macro conditions; the AI narrative linking global markets more tightly with A-shares; an industry trend that is still awaiting sustained validation; limited incremental capital, meaning mostly existing money "shooting and moving" between sectors; and faster information dissemination, where a single expectation is quickly priced in—or even over-priced—by the market. The result? For ordinary investors, the difficulty of predicting the next hot sector has risen sharply. By the time you spot the trend, research it, and complete your buy, rotation has often already moved on to the next stop.

Why does the "supermarket strategy" fail to pay off?

Facing rapid rotation, a common response is to "buy several sectors—one of them is bound to hit." This is the logic behind the "supermarket" approach to index investing. But this strategy runs into several unavoidable problems. First, timing is tough to get right. Sector ETFs are more volatile; buying after a rally only to see a pullback can quickly widen floating losses, trapping investors in a vicious cycle of "chasing highs—getting stuck—cutting losses—re-chasing highs." Second, decision-making costs pile up. Holding a dozen sector ETFs means tracking fundamentals, valuations, and capital flows across many industries simultaneously—beyond the capacity of most retail investors, who eventually fall back on gut-feel adjustments. Third, over-diversification flattens returns. As sectors ebb and flow, gains from leading sectors get diluted by underperforming positions. The more sectors you hold, the closer your portfolio moves toward the market average. Fourth, chasing during rapid rotation delivers poor results. Data shows that correlations between this week's and last week's sector returns—and their ranking correlations—have frequently turned negative recently: last week's strong sectors are not necessarily winners this week.

Simplify: how to allocate during accelerated rotation?

The conclusion is straightforward: less is more—simplify. The faster the rotation, the more you need to recognize your limits. Individual investors can't cover dozens of sectors or consistently forecast rotation direction. Broad-based indices, by contrast, offer wide coverage and relatively dispersed volatility—capturing market beta at a lower tracking cost. For sectors you genuinely believe in, use satellite positions. The "core + satellite" approach essentially lets you secure market beta while retaining the possibility of sector alpha. Its value isn't just in returns—it's in making your portfolio executable amid rapid rotation: no daily calls on sector strength, no emotional trading from missing a hotspot entirely.

When it comes to specific broad-based choices, the CSI 300 Index comprises 300 large-cap, highly liquid stocks from both the Shanghai and Shenzhen exchanges, representing the blue-chip segment. The CSI A500 Index selects 500 large-cap, liquid constituents across all industries, offering a relatively more balanced sector distribution with higher tech exposure. On the product side, 沪深300ETF易方达 (510310) tracks the CSI 300 Index, while A500ETF易方达 (159361) tracks the CSI A500 Index—both charge the market's lowest management fee tier of 0.15% per year. Investors without a brokerage account can consider the corresponding feeder funds—易方达沪深300ETF联接基金 (A/C/Y: 110020/007339/022928) and 易方达中证A500ETF联接基金 (A/C/Y: 022459/022460/022930).

In a market where rotation speeds up, allocation certainty often matters more than the odds of chasing returns. Rather than oscillating between hotspots, first steady your portfolio's core positions.