Why it Works:
The strategy is based on a persistent and well documented anomaly in financial markets - assets that have performed strongly over the recent past are likely to continue to do so in the near future – this is called “The Momentum Factor”. This phenomenon is well known and has been employed by hedge funds and trend following traders successfully for decades in commodity, currency, and stock markets. There are several books and papers written on the momentum factor, but to date, we have yet to find an asset manager who applies a rules based momentum strategy in this specific way and with these types of results. This is not to say that institutional investors are not employing similar strategies (no doubt, they are), but it is to say that, at least as far as we know, everyday investors have not historically had access to these types of strategies. We want to change that.