This is the monthly performance update for The MarketFighter Strategy. It’s the systematic strategy I have followed for the past 5 years and share with subscribers of this newsletter.
As always, I will give you a fully transparent look into the monthly performance as well as an update on the full year until now.
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Extended outperformance in July
Back in June, we registered the first negative month for the strategy in 2026, underperforming the market, which was in positive territory.
July marked a great comeback for the strategy with a total return of 3.59% while the MSCI World Index was flat, registering a minor loss of -0.17%. The S&P 500 followed the world index with a small -0.13% decline.
The chart below shows the performance of the strategy (orange) compared to the MSCI World Index (gray) month by month:
As usual, all numbers I present in these reports are measured in EUR and based on the underlying indices (not accounting for individual fees or taxes).
A month-by-month review is not necessarily the best way to evaluate a long-term strategy, but I like the overview and I know a lot of readers find value in it as well.
Personally, the performance of any individual month does not affect me in any way. Of course, it’s a pleasure to register a new month of market-beating returns, but it doesn’t change anything for me. I simply keep sticking to the same formula as I have done for the past 65 months.
Below is an accumulated chart of the returns generated so far in 2026. By popular demand, I have included the S&P 500 as well (but be aware that it is not currency-adjusted).
ETF allocations in July
🌍 Factor ETF: US Value
🏢 Sector ETF: Energy Sector
The system held the same two ETFs in July as it had done in June. But while US Value outperformed and Energy underperformed in June, their roles reversed in July.
The Energy Sector ETF outperformed the market significantly by more than 12%, primarily due to a major increase in oil prices.
Meanwhile, the US Value ETF underperformed by around 5%, mainly because of a sudden decline in semiconductors and AI-related stocks, some of which currently happen to be classified as value stocks.
We often see this pattern: when one of the ETFs underperforms, the other outperforms. It doesn’t always work like that, but in recent months this pattern has dampened the volatility of the strategy significantly compared to the broader market.
The diversification benefit of this strategy comes not only from picking ETFs over individual stocks, but also from allocating across two ETFs that in most cases don’t have a big overlap.
Allocations for August
Looking for the new August trading signal? If you’re curious about which ETFs the strategy is currently allocated to, find it here:
The monthly breakdown
In the table below, I have provided the exact performance of the strategy on a monthly basis compared to the market (the MSCI World Index), as well as the alpha (the difference between our return and the market return):
You may also notice that the allocations of the strategy have been remarkably steady so far in 2026. Energy has been the favored sector in 6 of the 7 months, while the same can be said about US Value on the factor side.
The most important number for me is the 15.64%, representing our excess return compared to the world index.
This is already above the average annual outperformance of the strategy. However, as I mentioned in the previous performance report: The current performance numbers (or allocations, for that matter) do not help us in any way in predicting what will happen in the remainder of the year.
A couple of weeks ago, I posted an article revealing all the monthly returns of the strategy during the past 10 years. If you find it interesting, it can be found here:
➡️ Monthly return history for the MarketFighter Strategy
Why two people will never experience the same returns
I love the feedback I receive from all of you. It helps me improve this service and figure out which topics deserve a deeper dive.
One thing I’ve seen a few times (especially from readers trading US-listed ETFs) is that their returns differ from the numbers I present. It’s important to note that two people will never experience the exact same returns when trading this strategy.
Here’s why:
Indices vs. ETFs
First of all, the numbers I present in these reports are based on the underlying indices and not on a particular set of ETFs. I do this because there are tons of ETF implementations available across different regions of the world, and I can’t cater to all of them. Their values may fluctuate, but they will all be close to the value of the underlying index.Currency fluctuations
The second factor is currency. While I present numbers in EUR, many subscribers trade in USD, GBP, or another currency. This means your return numbers will be affected by your currency’s movement against the EUR every month.Trading and implementation
Finally, the implementation of the strategy matters. The exact price you get when you execute a trade is unique to you and will affect your total return numbers. On top of that comes trading fees, which are again highly individual.
But while all these factors can give slightly different numbers month by month, I believe they will tend to even out in the long run (unless a major and permanent currency shift occurs).
In some months, you will see a better return than what I present, and in some months it will be worse. While it can cause a bit of frustration, it tends to smooth out over time, as it’s primarily driven by currency fluctuations.
I have plans to look further into this soon, as I want to find a better way to accommodate more of the different ways this strategy can be implemented.
Next steps
If you found this post interesting, and you’re not part of the journey yet, don’t forget to subscribe. I provide a number of free articles every month.
If you want to receive the monthly trading signals and get full access to the strategy, simply upgrade to the paid subscription to join us. (Psst: You get the best price by doing this through a web browser and not inside the Substack mobile app!)
Thanks for reading!
Disclaimer: The MarketFighter Strategy is for educational and informational purposes only. It is not financial advice, and the author is not a licensed investment advisor. Investing in ETFs involves significant risk, and past performance is never a guarantee of future results. You are solely responsible for your own trades and financial outcomes. Read the full Disclaimer here.
A little side note (and I think it is just a side note, but still worth commenting on), value funds in general and VLUE as well have a large position in Micron (MU). It is currently 20% of that ETF. It accounts for large amounts of that ETFs gain, which is feeding into the momentum that keeps that fund in your system. MU's margins are at about 85% (incredible and unsustainable) and the stock is up like 150% in the last 6 months. While your system is a system that does not require analysis of the components of the ETF (and it could be said that doing that analysis would shift the system from system to stock picking), it is an interesting factor when an ETF has such consolidation inside it. XLE also has Exxon (XOM) at 20% of the ETF, but with a much more modest up 30% YTD. Your system has been pointing to the same ETFs in a row that, frankly, doesn't give you the best material for writing your own content, even if it is actually a great result for the simplicity of execution in your system. Maybe it is worth exploring how you think about single name concentration in the ETFs.
Keep crushing it, those are good returns. I invest in 5 dividend ETFs authorized in Europe (I'm in Germany), and they outperformed my growth stocks and Bitcoin in July. Value investing still works.