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•@Wealth-Accelerator What is your opinion based on? So purely in terms of the performance of the indices, there is a strong argument in favor of the momentum factor in the MSCI World, which then performs comparably well to an SP500. Or am I missing something?
Here is a comparison of the indices:
https://curvo.eu/backtest/de/vergleiche-indizes/msci-world-vs-msci-world-momentum-vs-sp-500?currency=eur
Here is a comparison of the indices:
https://curvo.eu/backtest/de/vergleiche-indizes/msci-world-vs-msci-world-momentum-vs-sp-500?currency=eur
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@ad_absurdum In the long run, the difference is really extreme. From 2024 to 2025, however, the two no longer have much in common, even if Momentum is still just ahead. Of course, it was probably a good thing to be heavily invested in Mag7s in the past when they were rising rapidly. However, they are no longer rising (or falling, like Microsoft) as strongly as in the past, so there is no longer such a large excess return. Doesn't make the decision any easier.
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@ad_absurdum
If you weight an entire index according to momentum, it has been proven that it performs better than the benchmark index without momentum.
The stumbling block is the transaction costs. With an entire index, a change every 6 months just has a noticeable effect after deducting the costs. However, you no longer have a passive investment approach. The backtest already shows a great outperformance over the total duration. I believe more in a core-satelitte approach with a more aggressive momentum strategy than an overall index.
But this is largely a matter of taste and due to the fact that backtests are impressive, but not exclusively forward-looking.
If you weight an entire index according to momentum, it has been proven that it performs better than the benchmark index without momentum.
The stumbling block is the transaction costs. With an entire index, a change every 6 months just has a noticeable effect after deducting the costs. However, you no longer have a passive investment approach. The backtest already shows a great outperformance over the total duration. I believe more in a core-satelitte approach with a more aggressive momentum strategy than an overall index.
But this is largely a matter of taste and due to the fact that backtests are impressive, but not exclusively forward-looking.
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@Wealth-Accelerator I see it similarly, for me core/satellite only makes sense if the small satellites can also achieve disproportionately higher potential returns than the core. The "few" percent more return that the MSCI World Momentum has achieved compared to the MSCI World would not be enough for me personally to want to use it as a satellite
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