Profitable Trading of International Mutual Funds – Weekly Cyles of Opportunity
A recent academic article studies potentially profitable trading opportunities in international mutual funds. Their study indicates a tendency for international funds to have lower or negative returns on Mondays, compared with other days of the week.
These patterns are believed to be caused by the computation of fund net asset values (NAV) values from stale international stock prices, traded in other time zones. In this paper, Several trading strategies are proposed and evaluated in a systematic fashion, giving strong evidence that this pattern could produce above market returns.
Whether you choose to execute these strategies on a frequent basis or not, it may make it worthwhile to execute purchases of international mutual funds on Mondays, giving yourself an extra statistical edge.
