MSCI’s momentum gauge has beaten the MSCI All Country World Index by 17 points, marking its longest stretch of outperformance since 1991. The streak is the best in more than three decades, according to data from the index provider.
The streak in numbers
The gauge, which tracks stocks with the strongest recent price momentum, has consistently outperformed the broad ACWI over this period. The 17-point gap is the widest lead since the early 1990s. Back then, the momentum factor was just gaining traction among institutional investors. Now it’s back with a vengeance.
MSCI doesn’t break out the exact start date of the current streak, but the cumulative outperformance is clear. The gauge has risen more than the ACWI for a sustained run not seen in over 30 years.
Why momentum is winning
The momentum factor tends to thrive when markets are trending strongly and sectors rotate quickly. Right now, a handful of high-momentum stocks — particularly in tech and growth — have powered ahead, lifting the gauge. Meanwhile, value and defensive stocks have lagged, weighing on the ACWI’s overall return.
It’s a pattern that’s played out before, but rarely for this long. The last time the gauge outperformed by this magnitude was in the lead-up to the 1990s bull run.
What comes next
The big question for investors is whether the momentum factor can keep its edge. Historically, momentum strategies can suddenly reverse when market leadership shifts. But so far, the gauge shows no sign of fading.
MSCI’s next monthly rebalance, due in early November, will provide the first official update on whether the streak continues. Until then, traders will be watching daily price moves for any hint of a turn.
