Upgrading:
Responding to Changing Stock Markets
What is Upgrading?
Upgrading is a disciplined investment strategy that selects mutual funds and ETFs based on near-term performance. It has the flexibility to invest both domestically and globally in the sectors, regions and strategies we identify as being in synch with current market leadership.
To Upgrade, we measure the near-term performance (twelve months and less) of mutual funds and exchange traded funds (ETFs) and compare them to returns of other funds with similar risk. We invest in funds with the best recent returns, and monitor their performance. When a fund drops in our ranks, we “Upgrade” to the new market leaders.
Academic research has found that funds that performed well against their peers in recent months tend to continue that outperformance into ensuing months, a phenomenon called “persistence of performance”. Upgrading is a disciplined way of taking advantage of a fund’s performance persistence.
FundX Investment Group (formerly DAL Investment Company) has been used the Upgrading investment strategy to manage separate client accounts for over 40 years. NoLoad FundX began in 1976 as a way to share the Upgrading strategy with individual investors.
NoLoad FundX’s Upgrading Portfolio: Monthly Upgrader Portfolio
The Monthly Upgrader Portfolio (MUP) is NoLoad FundX’s model growth portfolio. The MUP may be used on its own or in conjunction with the Monthly Flexible Income Portfolio (MFIP).
Similar to the growth portfolios that DAL manages, the MUP invests primarily in core, Class 3 funds with limited exposure to more speculative funds from Classes 1 and 2.
Each month, the Monthly Upgrader Portfolio (MUP), shows exactly what stock funds to buy and what funds to sell. The MUP is easy to follow and has a history of strong performance.