WIMA applies trend-following signals to international developed markets, switching between stocks and cash based on moving average crossovers. It's designed to capture upside in bull markets while sidestepping major drawdowns by moving to Treasury bills when trends turn negative.
How It Works
The fund tracks an index that monitors 200-day moving averages across developed international equity markets. When prices trade above their moving averages, it holds international stocks; when they break below, it rotates into short-term U.S. Treasuries. This binary approach means you're either fully invested in foreign equities or completely in cash equivalents, with no middle ground.
Key Features
- All-or-nothing exposure that's either 100% international stocks or 100% T-bills
- Systematic trend-following without human intervention or market timing discretion
- Zero expense ratio makes it cheaper than buying the underlying components separately
Risks
- Whipsaw risk during choppy markets could trigger multiple taxable switches while missing rebounds
- Moving averages lag by design, so you'll miss the first 10-20% of any new bull market
- Currency risk remains unhedged when invested internationally, adding 5-15% annual volatility
Who Should Own This
Best suited for investors who want international exposure but lose sleep during bear markets. Works well for retirees or near-retirees who prioritize capital preservation over maximizing returns. The systematic approach removes emotional decision-making, making it useful for those who tend to panic-sell at market bottoms.