Young Professionals

The trend is your friend

Henri Vuong explores why momentum strategies are gaining ground

It is said that the past does not predict the future; however, a good track record is often one of the criteria for fund manager selection. So does past performance provide information about future returns?

What is being described here is persistent performance, where the outperformance or underperformance of a fund persists over an investment horizon. Thus implying that recent track record could be a good predictor for future short-term movements in performance. There are several reasons why this may be the case.