Globe Trotter

This strategy holds the 3 country/regional ETFs with the strongest trailing 3-month returns, equally weighted. This month's rankings shifted: Taiwan (EWT, +9.3% 3-month return) remains the top pick on continued AI/semiconductor strength, joined by Europe (VGK, +7.5%) as European indexes hit record highs on strong Q2 earnings and AI-infrastructure suppliers, and Japan (EWJ, +7.1%) as the Bank of Japan's historic rate hikes and governance reforms fuel a rally. South Korea (EWY) and broad Emerging Markets (EEM), last month's top picks, have dropped out: Korea suffered an extreme boom-bust swing this summer that pushed its 3-month return negative even though its 6-month return is still huge, and EEM's 3-month return also turned slightly negative. We're selling EWY and EEM completely and rotating into VGK and EWJ, while keeping the Taiwan (EWT) position, landing on an equal ~33% weight in each of the three new momentum leaders.

This portfolio starts entirely in cash, so we're building fresh positions based on 3-month price momentum across the country/regional ETF universe. The three strongest performers over the trailing 3 months are South Korea (EWY, +43.95%), Taiwan (EWT, +42.91%), and broad Emerging Markets (EEM, +15.65%) — all clearly positive and well ahead of the next-best option (SPY at +13.76%), so per the strategy we hold exactly these three, equally weighted at roughly 33% each, with no cash left idle since all three qualify as positive performers. The common thread behind Korea and Taiwan's surge is the AI-driven semiconductor supercycle: Korea's memory chip giants (Samsung Electronics and SK Hynix) are riding surging demand for high-bandwidth memory used in AI accelerators, while Taiwan's rally is powered by TSMC's dominance in advanced chip manufacturing for AI hardware. Emerging Markets broadly (EEM) is riding the same wave since MSCI's EM index itself has become increasingly weighted toward Taiwan and Korea's tech sectors, alongside a weaker U.S. dollar and renewed foreign capital flows into China and India. Buying all three gives us concentrated exposure to the AI hardware supply chain (through Korea and Taiwan) plus a slightly more diversified emerging-markets sleeve, following the momentum strictly as the strategy dictates rather than making independent judgment calls on valuation or overlap risk. Investors should note this creates meaningful sector concentration in semiconductors and technology across all three holdings, which is a natural byproduct of a pure momentum rotation strategy in this environment.