Is It Time for Cyclicals to Shine?

With all the worries over macroeconomic uncertainty this year, it’s difficult to imagine very many expected cyclical stocks to perform exceptionally well. However, it seems that cyclicals are finally having their moment in the sun.

Recent insights from the BNY team broke down what’s going on with the cyclical rally. To start, the BNY team notes that the equity rally is broadening far beyond the traditional big tech stocks that have dominated large-cap strategies up until this point.

Furthermore, as the chart above illustrates, we’re now seeing moments where cyclicals are outperforming defensive sectors. This is extremely interesting, given that advisors and investors initially flocked to these defensive sectors earlier in the year, when macroeconomic uncertainty first began to build.

Going a step further, BNY noted that high-beta stocks are at year-to-date highs relative to the broader market. As BNY points out, this could indicate that the market as a whole is embracing a more bullish mentality.

Market optimism in the face of relative uncertainty creates a relatively difficult challenge for advisors seeking to meet the moment. Luckily, the ETF wrapper’s flexibility can offer several ways to gain cyclical exposure in a risk-aware manner.

Tap Into Cyclicals Through A Value Strategy

As one example, take a look at the BNY Mellon Dynamic Value ETF (BKDV). BKDV is an actively managed fund from BNY that looks to offer deep capital appreciation by investing in a selection of value stocks.

The fund’s stock selection process blends both quantitative and fundamental research. BKDV’s bottom-up approach zeroes in on three factors for its potential investments: intrinsic value, sound business fundamentals, and positive business momentum. By doing so, the fund looks to invest in companies that offer a blend of deep long-term value with solid fundamentals and momentum.

Crucially, BKDV currently has a sizable tilt towards more cyclical sectors. As of October 31, 2025, two of the three largest sectors in BKDV’s portfolio are cyclicals: financials and industrials. Together, these two sectors alone make up a little over 39% of the fund’s portfolio, as of the end of November 2025.

However, the rest of BKDV remains diversified in a variety of other sectors. This diversification lets BKDV tap into cyclical momentum without solely relying on it for success.

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