Global Momentum – A smarter base portfolio for active investors
Investing shouldn’t be a roller coaster ride. For most retail investors, the risk of making bad decisions at the wrong time is one of the biggest obstacles to achieving their financial goals. Our new Multi Asset Strategy, Global Momentum, is designed to help you invest with peace of mind and stability – without giving up the potential for good returns.
Please note that historical returns do not guarantee future results, and our strategies are for inspiration – not personal advice.
What is a Multi Asset Strategy?
A Multi Asset strategy means that the portfolio invests in several different asset classes, such as stocks, commodities, bonds and gold. The idea is simple – different assets often move in different directions. By spreading the risks, we can create a more stable portfolio that is not as thrown around by market fluctuations.
Built on the all-weather concept
The strategy is based on the so-called all-weather concept, which aims to create a portfolio that works well in all market climates. Regardless of whether we are in an inflation shock, recession or strong growth period, there are assets in the portfolio that benefit.
Switching allocation with momentum
What is unique about our strategy is that we don't just lean towards diversification. We also use momentum to actively shift up or down the allocation across assets. This means that when certain assets show strength, we increase their position, while reducing exposure to those that are underperforming.
A momentum strategy works best when the market is moving steadily in one direction for a long time, as it can take advantage of existing movements. However, if markets are volatile and change direction quickly, the strategy risks underperforming because buying and selling are often done too late, which can lead to losses on sudden reversals.
To reduce the risk of major downturns, diversification across asset classes with low correlation can help, as some assets tend to perform positively when others perform weaker. This evens out returns and makes the strategy more robust in different market conditions.
Below we see how the allocation for the five different holdings has changed up and down.
Stability and returns in focus
The goal of the strategy is to achieve at least as high a return as the stock market – but with significantly lower fluctuations. This gives you the opportunity to stay in the market without feeling the need to sell at the slightest decline.
Global Momentum consists of five holdings that are rebalanced monthly based on our Pure Momentum rating. The strategy has shown stable performance and delivered a higher risk-adjusted return than the stock market.
By including commodities in the allocation, the strategy managed to gain 7% in 2022, while the stock market fell by double digits. The volatility and maximum drawdown have been lower than in our Global Trend strategy – which is expected, as Global Trend consists of three holdings compared to Global Momentum which consists of 5 holdings.
Strategy key figures (backtest without leverage, from Jan 2017 to Jan 2, 2025):
| Name | CAGR | Sharpe | Volatility | Max decline | Beta | Correspondence with OMX |
| Box Play | 7.7% | 0.99 | 7.0% | -16.3% | 0.35 | 0.78 |
| Power Play | 10.5% | 1.17 | 8.3% | -17.1% | 0.26 | 0.53 |
| Global Trend | 13.5% | 1.05 | 12.1% | -21.1% | 0.18 | 0.24 |
| Global Momentum | 9.2% | 1.18 | 7.0% | -6.1% | 0.19 | 0,42 |
| Tactical Diversification* | n/a | n/a | n/a | n/a | n/a | n/a |
| MSCI Sweden | 9.9% | 0.56 | 15.8% | -33.0% | 1.00 | 1.00 |
*Tactical Diversification is a strategy based on an AI model. Instead of backtesting, the AI model is trained on historical data and then “played live” on unseen data. Follow the development of Tactical Diversification and all strategies in the Weekly Report published on the blog.
Development: Jan 2, 2017 to Jan 2, 2025
Why not just buy an index fund?
Warren Buffett and many others recommend that private investors continually save in a low-cost index fund. That's sound advice for most people – provided they can handle the big swings that the stock market offers.
But if we have the interest, time and knowledge, there is the opportunity to act smarter and manage risk more effectively. Some investors strive to minimize risk and maximize returns through active decisions, while others are content to follow the market without much involvement.
Basically, we can see a passive investor as a trend follower – someone who follows the market's movements without using tactical models to limit declines.
If you've ever saved monthly in an index fund with 100% stocks, you've effectively been a trend follower – but without protection against major downturns. The problem? When the market falls sharply, there's no safety net, and it can be difficult to stay invested.
Our Multi Asset strategy gives you a smarter way to invest. You retain the potential for good returns, but minimize the risk of major setbacks.
A basic portfolio for active investors
The Global Momentum strategy is perfect as a base portfolio for those who want to be active and update their portfolio once a month. It is included in our premium package and gives you easy access to monthly updates.
We believe that the best strategy is the one you can stick to over time. Our Multi Asset strategy makes it easier to stay in the market, avoid the big losses and build a portfolio that you can be confident with all year round.
