US Financials: trend-following strategy vs buy & hold
Equities · tracked with Financial Select Sector SPDR (XLF)
XLF holds the financial companies of the S&P 500 — banks, insurers, payment networks, asset managers and exchanges.
Growth of 100 since 1998
buy & hold · total returnBuy & hold total return of Financial Select Sector SPDR (XLF). The Strategy Alpha results and live signal for US Financials are part of Plus.
What drives US Financials
Interest rates and the shape of the yield curve, loan growth, credit losses and regulation.
How a trend-following strategy handles US Financials
Financials fell more than 75% in the 2008 financial crisis — a reminder that a sector can be wiped out even when the economy later recovers. Exiting downtrends is the core of the case for trend-following here.
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.