Trend Following

Rules-based trend-following strategies have been successfully used in the financial markets for over 30 years and collectively have well over $100 billion under management. A number of these managers have delivered strong long-term returns with gains in both of the equity market crashes this decade.

Historically, many investors have been unaware of trend following because it was only offered in complex investment products. In recent years however, the growth in exchange-traded funds (ETFs) has enabled innovative firms to offer this style of investing to traditional investors.

ETF PM’s oldest portfolio now has over five years of strong actual performance, and three of the firm’s other active strategies delivered double digit gains in the market downturn of 2008. Visit the links below to learn more.

1) ETF PM explains why trend following is an important component for all diversified portfolios:

ETF PM on Trend Following

2) A number of leading trend followers delivered gains in the crash of 2008:

http://www.michaelcovel.com/2009/03/26/top-2008-earners-trend-followers-right-there/

3) Index Universe profiles ETF PM after the firm delivers positive returns in 2008:

http://www.indexuniverse.com/sections/features/5706-david-kreinces-qa.html?Itemid=5

4) In 2009, an index of trend-following funds fell 4.7%; its first decline in 15 years:

http://www.bloomberg.com/apps/news?pid=20601109&sid=a.d2vyHFS5Rc&pos=15#

5) Read one of the first books on trend following:

“TREND FOLLOWING: How Great Traders Make Millions in Up or Down Markets” by Michael Covel

6) The index shown here is primarily comprised of funds that employ trend-following strategies:

http://www.barclayhedge.com/research/indices/cta/sub/sys.html

7) This trend-following portfolio manager expresses his opinion about the future of investing:

http://business.asiaone.com/Business/My%2BMoney/Opinion/Story/A1Story20090608-146906.html

 

8) An article that compares discretionary fundamental trading strategies to rules-based trend following:

http://www.moneymanagement.com.au/article/Managed-futures-a-bright-spot-amid-the-gloom/487394.aspx

©2010 ETF Portfolio Management, LLC