Upgrading Strategy

Proven, Time Tested Strategy

NoLoad FundX provides investors the tools necessary to apply the successful Upgrading Strategy to their own portfolios. Upgrading is a quantitative approach that guides us to the best performing funds and ETFs available - whatever the current market conditions.

Upgrading involves measuring near-term performance of mutual funds (twelve months and less) and comparing them to returns of other funds with similar risk. We invest in funds with the best recent returns, and hold them as long as they continue to outperform. When a fund drops in our ranks, we “Upgrade” to the new market leaders.

Unlike most investment approaches, Upgrading only considers near term performance because only near-term returns indicate funds doing well in the current market environment. Funds that have outperformed in recent quarters tend to continue to show strength into ensuing quarters, a phenomenon known as "persistence of performance." Upgrading is a disciplined method of exploiting this phenomenon.

Upgrading involves 3 Steps:

  1. Invest in the funds marked as buys.
    Choose funds based on your broker’s availability and your expected holding period. We recommend holding funds at least 90 days before Upgrading.
  2. Hold these funds as long as they continue to rank as a buy or hold.
  3. When a fund moves into Suggested Upgrades, consider selling.
    Before you sell, consider if you will incur a redemption fee from the fund or from your broker. Taxable account holders should also consider the tax implications of selling a fund.