Emerging Markets: trend-following strategy vs buy & hold
Equities · tracked with iShares MSCI Emerging Markets ETF (EEM)
EEM holds large and mid-sized companies from emerging economies — mainly China, Taiwan, India, South Korea and Brazil.
Growth of 100 since 2003
buy & hold · total returnBuy & hold total return of iShares MSCI Emerging Markets ETF (EEM). The Strategy Alpha results and live signal for Emerging Markets are part of Plus.
What drives Emerging Markets
Global growth, commodity prices, China's policy and, very importantly, the US dollar: a weaker dollar usually helps emerging markets.
How a trend-following strategy handles Emerging Markets
Emerging markets have gone through long boom-and-bust cycles and long periods of going nowhere. Trend-following helps decide when they are worth owning at all.
Our Strategy Alpha applies the same simple, rules-based trend filter to every market: invested while the trend is up, in Treasury bills while it is down, checked once a month. It is not a forecast — it is a discipline that aims to keep most of the long climbs and sit out the deepest drawdowns.
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Educational content, not investment advice. Backtested results are hypothetical and do not guarantee future results. Disclaimer.