Accelerating Dual Momentum (ADM)
A faster variant of Antonacci's Dual Momentum - instead of looking at the last 12 months it adds up the 1, 3 and 6-month returns, and it is always 100% in a single asset.
What Accelerating Dual Momentum is
Accelerating Dual Momentum (ADM) is a strategy that Steve Hanly published on 2 May 2018 on his blog Engineered Portfolio, in the article Accelerating Dual Momentum Investing. It is not an academic paper: it is a blog post, but it is the original source of the rule.
It starts from Antonacci's Dual Momentum (GEM), which compares assets by their return over the last 12 months. Hanly replaces that measure with an "accelerated" score that gives more weight to the recent past. Hence the name: the signal changes sooner, for better and for worse.
Momentum is the trend of a price: what has risen in recent months is assumed to tend to keep rising in the short term, and what has fallen to keep falling. "Dual" means two criteria are used at once: choose the better of two equity assets (relative) and exit to bonds if both are doing badly (absolute).
Quick facts
- Author
- Steve Hanly (Engineered Portfolio)
- Year
- 2018
- Origin
- Community
- Access
- Public and free
- Type
- Tactical
- Assets
- 3
- Frequency
- Monthly
- Difficulty
- Low
Who it is for
Anyone who knows Antonacci's Dual Momentum and wants to see a version that reacts sooner, with a single decision a month.
Who it is not for
Anyone who cannot stand being 100% in a single asset or changing position more often than with GEM.
Current signal
Accelerating Dual Momentum
Calculated with the closes of September 30, 2026.
No portfolio changes from last month.
Rules, step by step
At the close of the last business day of each month:
- Score. For the S&P 500 (SPY) and for international small caps (SCZ), add up their total return over 1, 3 and 6 months.
- Both doing badly. If both scores are negative, 100% of the portfolio goes to TLT (US Treasury bonds with 20+ years to maturity).
- Otherwise, 100% goes to the asset with the higher score.
- Hold until the close of the following month and repeat.
An example with hypothetical figures, just to see the mechanism: if SPY rises 2% in one month, 4% in three and 5% in six, its score is 11%. If SCZ shows 1%, 3% and 1%, its score is 5%. SPY wins and the whole portfolio goes to SPY.
Decisions made by this site
The assets. The author's backtest uses three Vanguard funds: VFINX (S&P 500 index), VINEX (international small caps, actively managed) and VUSTX (long-term Treasury bonds). We use ETFs: SPY, SCZ and TLT. The author does not specify particular ETFs. The alternative to SCZ would be VSS, with less history.
The tie at zero. The source does not clarify what happens if the best score is exactly zero. In our implementation it only goes to TLT if both scores are strictly negative; in any other case the higher one is chosen, and in a tie SPY wins.
With the closes of September 30, 2026, the current signal is 100% in SPY. The detail is in "Current signal", above.
Backtest and out-of-sample period
With real ETFs from Aug 2008 to Sep 2026, ADM returns 12.5% a year, with a maximum monthly drawdown of -34.9% and volatility of 15.1%. The S&P 500 over the same long period: 10.8% a year with a maximum drawdown of -51%. Costs are 0.1% per trade.
Average annual turnover is 366%, against 158% for GEM. It spends 17% of months in long bonds. Because it is always 100% in a single asset, each signal change moves the entire portfolio.
And since it was published?
Since May 2018, the month the article was published, ADM returns 9.0% a year with a maximum drawdown of -34.9%. It is a short stretch and proves nothing on its own, but it is the only one the author could not see when designing the rule.
What the author publishes
With the three Vanguard funds, from January 1998 to February 2018 (the exact end date varies between the text and the charts), the article says that $10,000 would have become $426,408, against $39,063 for the S&P 500. The annual return and maximum drawdown figures only appear in images and we do not transcribe them.
The article also includes a test with long Shiller-type data from 1871, in real terms (inflation-adjusted): 10.5% a year and a 34% maximum drawdown for ADM, against 9.1% and 43% for GEM. These are the author's figures, without commissions or taxes, and we have not recalculated them.
9.0% a year · max drawdown -34.9% · S&P 500 over the same period: 15.2%
An "out-of-sample" result: the period after the rule was published, which could not have been used to tune the rules.
Growth of $100 (logarithmic scale) since , with 0.1% costs per trade. Data: US-listed ETFs, total return (dividends reinvested), before taxes.
Drawdowns from peak
| Strategy | CAGR | Volatility | Max drawdown | Sharpe |
|---|
Year by year
| Year | Accelerating Dual Momentum (ADM) | S&P 500 | 60/40 |
|---|---|---|---|
| 2026 (to Sep 2026) | +4.3% | +12.7% | +5.8% |
| 2025 | +20.0% | +17.7% | +13.8% |
| 2024 | +12.4% | +24.9% | +14.7% |
| 2023 | +14.7% | +26.2% | +17.2% |
| 2022 | -31.0% | -18.2% | -17.0% |
| 2021 | +19.9% | +28.7% | +15.9% |
| 2020 | +28.2% | +18.3% | +15.0% |
| 2019 | +12.6% | +31.2% | +21.9% |
| 2018 | +5.7% | -4.6% | -2.4% |
| 2017 | +23.2% | +21.7% | +14.0% |
| 2016 | +0.5% | +12.0% | +7.6% |
| 2015 | +0.8% | +1.2% | +1.3% |
| 2014 | +14.0% | +13.5% | +11.7% |
| 2013 | +24.7% | +32.3% | +16.9% |
| 2012 | +14.0% | +16.0% | +11.1% |
| 2011 | +21.8% | +1.9% | +7.4% |
| 2010 | +7.2% | +15.1% | +12.8% |
| 2009 | +18.2% | +26.4% | +13.1% |
| 2008 | +32.8% | -36.8% | -14.9% |
The first year may be partial. Returns are net of trading costs.
Taxes on rotating
The results above are before taxes. This strategy re-assesses the portfolio every month: historically it turns over an average of 366% of the portfolio a year and spends 17% of months in defensive mode. Every change is a sale.
In most countries each sale of an ETF in a taxable account realises a gain or loss that may be taxed, so rotating monthly is best done inside a tax-advantaged account (such as an IRA or 401(k) in the US, or an ISA or SIPP in the UK) where one is available. Rules vary by country and by account: check yours, or ask a tax adviser. See our methodology for how the results are calculated.
Criticisms and limits
The source is a single author's blog post, without external review. Its original backtest uses an actively managed fund and does not deduct commissions or taxes. Being 100% in a single asset and looking back only 6 months implies more trades than GEM.
- One decision a month with three assets: very easy to follow and audit.
- It reacts sooner than GEM: the 1, 3 and 6-month score gives more weight to the recent past. The flip side, and this is our observation, is that more trades are to be expected than with GEM.
- All or nothing: 100% in a single asset takes on its full risk. When it is wrong, it is wrong with the whole portfolio.
- Backtest with an active fund: VINEX is actively managed, so the original result mixes the rule with a manager's skill. The author himself uses another fund in his robustness test.
- No costs or taxes in the long test, and the result is from a single author without external review.
- A single safe asset: TLT. If long bonds also fall while both equity markets are doing badly, the rule has no plan B.
How to run it
- At the start of the month check this page's signal: it says which single asset applies.
- If it matches last month's, there are no orders.
- If it changes, sell the current asset and buy the new one. The rebalancing calculator works out the shares.
- Map each ETF to the fund you actually hold.
- Keep the details of your sales for your tax return: in a taxable account every change of asset may realise a gain.
Similar strategies
Frequently asked questions
What does "accelerating" mean in ADM?
That the score mixes three periods, 1, 3 and 6 months, instead of a single 12-month one as in GEM. By including the latest month, a recent trend change weighs more and the signal changes sooner.
What is the difference from Antonacci's Dual Momentum?
GEM compares 12-month returns between US and international equities, and uses Treasury bills as the threshold. ADM adds up the 1, 3 and 6-month returns, compares the S&P 500 with international small caps and takes refuge in long bonds if both scores are negative. GEM's details are on [its page](/en/strategies/dual-momentum-gem/).
Why SCZ and not VSS?
The author does not specify an ETF. SCZ has more history than VSS, which is the alternative. It is an implementation decision of ours.
What happens if the score is exactly zero?
The source does not clarify. In our implementation it only goes to TLT if both scores are strictly negative.
Is there a commercial version of this idea?
All-Weather Quad Momentum is a paid strategy that, according to a third party's public description, conceptually combines traditional Dual Momentum with ADM. Its rules are not public and this site does not replicate them.
Is this investment advice?
No. It is educational information about a published strategy. Neither backtests nor past performance guarantee future results, and you can lose money.
Sources and review date
- Hanly, "Accelerating Dual Momentum Investing", Engineered Portfolio (2 May 2018) · accessed October 10, 2026
Page last reviewed on October 11, 2026; figures and signal are recalculated at every monthly close (latest: September 30, 2026). How we work: editorial policy and methodology.
Educational and informational content. It is not investment advice or a personal recommendation. The results shown are historical simulations (backtests) using US-listed ETFs; past performance does not guarantee future results and you may lose some or all of the capital invested. Real returns will depend on your costs, taxes, currency and execution timing.