A Time-tested Approach to Fund Investing
Upgrading strategy is a logical, time-tested approach to investing that’s been confirmed by decades of academic and industry research as well as FundX’s real world track record.
Funds that have done well recently tend to continue to do well in the coming months and even years. Academics call this "persistence of performance", and they’ve been studying it for decades. Morningstar found evidence of it in its 2016 study, “Performance Persistence Among U.S. Mutual Funds”.
Upgrading is a disciplined, three-step process that’s designed to capitalize on the persistence of performance of funds and ETFs.
Step 1: Be selective.
We carefully screen the fund universe to help you build diversified fund portfolios and avoid unnecessary costs and risks. We focus on established noload funds that are available to retail investors through most brokers, and we seek out ETFs that trade well and have good liquidity.
Step 2: Manage risk.
We group funds by risk, separating the most aggressive funds from the most conservative, so you’ll know upfront if a fund is a core diversified fund or a volatile sector fund.
Our risk classes mix growth and value funds, international and domestic funds, and large- and small-cap funds so that you can easily spot the funds are doing well now.
Step 3: Invest in funds with strong recent returns.
We rank funds by recent returns and invest in the funds at the top of the ranks. We sell funds that don’t continue to perform well and reinvest in new top performers -- a process we call Upgrading.
Money Magazine called our Upgrading strategy “the Leapfrog Approach to Fund Investing”. It has helped thousands of investors use mutual funds and exchange-traded funds (ETFs) to build wealth, navigate changing markets, and meet lifelong investment goals since 1969.