BNPP IP: Momentum, the unloved factor

Momentum is unloved: being a good follower is rarely seen as a strength, and few asset managers would brag about using momentum as an investment factor, even though they know that ‘the trend is your friend’.

Part of this unpopularity comes from the fact that momentum is a purely behavioural factor: only human irrationality can explain it, and we are not at ease with our own shortfalls.

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BNPP IP: Momentum, the unloved factor