PremiaLab Research has issued a new paper titled "Navigating Market Shifts with QIS Trend and Momentum Strategies," which analyzes trend and momentum behavior in 2025 and the last five years using their pure factor models. First, trend-following has not performed well across all major asset classes; however, an equity cross-sectional momentum approach did very well. The directional changes associated with the high uncertainty in 20205 have hurt those following trends. Trend-following is a pure directional strategy, while a momentum strategy focuses on relative movement to create a long/short portfolio.
Over the longer term, equity momentum continues to perform well, but there were also substantial gains focused on short-term interest rates. Clearly, there are no exploitable trends in all assets, and the secret to good trend-following is to balance exposures across all asset classes.
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