Lesson 5 of 8
What you would actually buy
Every strategy on this site ends the month by naming something like SHY and a percentage. That is the whole output. So it is worth being plain about what the thing on the left actually is, because the site has been assuming you knew.
Ticker A short code that identifies one fund on one exchange — like a postcode, not a description. Two funds holding nearly the same thing have different tickers, and the same fund listed in two countries has two.
ETF Exchange-traded fund. A single holding that owns a basket of other things on your behalf, and that you buy and sell during the day like a share. Every asset these six strategies allocate to is one.
So SHY is an ETF, and what it holds is 1–3 year US Treasuries — government debt due back within three years. That is why the strategies reach for it when the signal turns: it is the corner of the portfolio least likely to move much in either direction. When the site says SHY · 100%, it is saying “hold nothing but that, this month.”
Buying it is unremarkable. You open a brokerage account, search the ticker, and place an order the same way you would for a share. There is no minimum beyond the price of one unit, and nothing about it is reserved for professionals.
Two costs worth knowing
The fund charges an annual fee, taken out of the price rather than billed to you — a few hundredths of a percent for the ETFs these strategies use. And each trade costs you the broker’s commission plus the spread, the small gap between the buying and selling price. Neither is large, but both are why a rule that trades once a month is cheaper to run than one that reacts to the news.
If you are outside the US
The tickers on this site are the ones in the papers, and they are all US-listed. A European or UK broker generally cannot sell them to a retail client — not because of the strategy, but because those funds do not publish the disclosure document EU and UK rules require. What you buy instead is a UCITS fund: a European-domiciled ETF, usually tracking the same index, listed in London.
The substitution is per asset, and it is rarely exact.
The rule is run on what you actually hold. The published figure was not.
What still holds
Momentum is measured on price, and knows nothing about which index a fund tracks or what it is priced in. Hold VUAG.L and it is scored on VUAG.L’s own history, before any ranking happens. You are not running an approximation of the rule — you are running the same rule on your own holdings.
What weakens
The published drawdown was measured on one specific universe. Swap an asset and it is a different universe. Lesson 6 has the measure of that: an independent replication moved VAA’s worst fall by dropping one asset, with the rule untouched.16.1% → 25.2%
So the scale above is not a quality rating — a substitute further down it is not worse, it is unmeasured. Two consequences, at different layers: a substitute you are unwilling to accept is a strategy you cannot run at all; and every one you do accept is a step away from the figure the paper published. LAA asks you to take 5 such steps. BAA asks 16.
Every asset these six strategies use has a UCITS substitute, so none of them is a dead end. But the further one sits from what the paper tested, the more choosing it is a judgement rather than a lookup. The iPhone app carries a full mapping for all six strategies with the trade-offs written out per asset, and lets you override any of them. Check anything you pick against your own broker before you rely on it — listings change, and this site is not tracking yours.