iFunds: Any momentum strategy claiming to get every trade right is very suspicious

Computer process investing through ETFs

Investors in momentum strategies have to accept that a high proportion of trades will go against them, according to Stacey Ash, investment manager at iFunds.

iFunds Asset Management runs three multi-asset funds, which employ a computer-driven momentum process. Price data for 34 asset classes is analysed and then ranked by price momentum and volatility. Its three funds - VT iFunds Absolute Return Orange, Indigo and Green - then gain access to the top ten asset classes on the list through exchange-traded funds (ETFs). The weighting of asset classes is determined by the volatility levels. The benefits (and pitfalls) of trend-based strategies Funds are rebalanced based on changes to asset price trends, with allocations shifting when a new a...