TAA.For The Masses
Strategy Library
Relative momentumby Mebane Faber

GTAA Aggressive (Top 3 of 13)

The three strongest of 13 asset classes, each with a trend filter.

Holding now

Signal from Aug 2026 close
  • DBC33%
  • IWD33%
  • EEM33%
  • DBCCommodities33.3%
  • IWDUS Large Value33.3%
  • EEMEmerging Markets33.3%

Signal preview: if the month ended today

  • DBC33%
  • MTUM33%
  • EEM33%

Unofficial. The rules only trade on month-end closes.

Trailing returns

Through Sep 25, 2026 · 3Y+ annualised

1M

+1.2%

YTD

+8.9%

1Y

+15.2%

3Y

+14.1%

5Y

+7.4%

10Y

+9.6%

Growth of $100

Backtest from Nov 3, 2008 to Sep 25, 2026 (17.8 years)

GTAA Aggressive (Top 3 of 13)+315%
60/40+459%
S&P 500+1087%

Growth of $100, rebased to the start of the selected range. Month-end prices, dividends reinvested, no taxes or trading costs.

Risk & return, full backtest

CAGR

+8.7%

Volatility

14.4%

Max drawdown

-21.2%

Sharpe

0.56

Sortino

0.77

Calmar

0.41

Best year

+27.8%

Worst year

-12.0%

Drawdowns

Percent below the prior peak, vs the S&P 500

Calendar-year returns

Faded bars are partial years · 61% of months positive

Strategy Lab

Stress-test the implementation: trade on the signal day's close or later, split the portfolio into tranches that rebalance on different days (reduces timing luck), use managed futures instead of T-bills as the defensive asset, or swap a fund for a same-asset-class alternative.

The idea

From Faber's relative strength research: rank a 13-asset global universe by an average of 1, 3, 6 and 12-month returns and hold the top three. Any pick below its 10-month SMA is held as cash instead.

The rules

  1. 1Universe: US large value & momentum, US small value & small cap, EAFE, EM, US 10Y & 30Y Treasuries, foreign bonds, corporates, commodities, gold, REITs.
  2. 2Score = average of 1, 3, 6 and 12-month returns; hold the top 3 equally.
  3. 3A pick below its 10-month SMA is replaced by T-bills.

Funds used

  • BWX Intl Treasuries
  • DBC Commodities
  • EEM Emerging Markets
  • EFA Intl Developed (EAFE)
  • GLD Gold
  • IEF 7-10Y Treasuries
  • IWD US Large Value
  • IWM US Small Cap
  • IWN US Small Value
  • LQD IG Corporate Bonds
  • MTUM US Momentum
  • TLT 20+Y Treasuries
  • VNQ US REITs

Early history uses proxy funds: SPY.

Recent allocations

Decided at each month-end, held the following month

  • Aug 2026
  • Jul 2026
  • Jun 2026
  • May 2026
  • Apr 2026
  • Mar 2026
  • Feb 2026
  • Jan 2026
  • Dec 2025
  • Nov 2025
  • Oct 2025
  • Sep 2025

More relative momentum