Global Navigator Strategy Overview

Global Navigator is a dual momentum strategy developed by Randy Harris of Dual Momentum Systems. It is always 100% in a single ETF - it asks two questions each month: should this money be in equities at all, and if so, which equities. When the answer to the first question is no, a third mechanism decides what kind of safety to retreat into.

The premise is that most of the damage a portfolio takes comes from being invested in the wrong thing during the wrong regime, and that a small number of well-chosen questions, asked in the right order, catch most of it. Global Navigator is deliberately spare. There are no sleeves, no partial weights, and no fine-tuning.

Core Strategy Logic

Every decision runs off the same momentum measure: a weighted average of trailing 1-month, 3-month, and 6-month total returns, weighted 25% / 25% / 50%. The six-month figure carries the most weight. Signals are computed at month end and drive the holding for the following month.

Step 1 - In or out (absolute momentum)

The stronger of U.S. large cap (IWB) and international equities (VXUS) is compared against cash (BIL). If the better equity option is beating cash, the strategy is Risk On. If cash is beating both, it is Risk Off.

This is the only test that matters for capital preservation. It does not attempt to predict a decline, and it does not care why one is happening. It simply declines to hold equities that are losing to Treasury bills.

Step 2 - Which equities (relative momentum)

When Risk On, the strategy holds whichever region has the stronger momentum:

• U.S. large cap (IWB), held at 100%, or
• International equities, held as a 50/50 pair of VXUS (unhedged) and DBEF (USD-hedged)

The international position is split between hedged and unhedged deliberately. Holding both halves the currency exposure rather than taking a view on the dollar, which is not something the momentum signal is measuring in the first place. Ties go to the U.S.

Global equity leadership rotates on long cycles, and the point of this step is to stay on the correct side of that rotation without having a forecast about it. Over 46 years the strategy has spent 183 months in the international sleeve, across 42 separate runs.

Step 3 - Which safety (Treasury Duration Limiter)

Most tactical strategies retreat to long Treasuries and leave it there. That works well when a selloff is a growth scare and badly when it is an inflation or rate shock, which is exactly when the two assets fall together.

The Treasury Duration Limiter (TDL) is Global Navigator's answer. It is a duration decision, made once per defensive episode:

Situation	Holding
First month of a Risk Off run, long Treasuries still profitable	EDV (long duration)
Later months, long Treasuries still profitable	TLT (long duration)
Long Treasuries themselves losing money	BOXX (short duration), locked for the rest of the run

The trigger is a sign test. When the momentum measure on long Treasuries turns negative, duration itself is the problem, and the strategy steps down to short duration for the remainder of that defensive episode. Global Navigator 300 substitutes TMF for EDV in the first month.

The lock is the important part. Once TDL commits to short duration, it does not go back within the same run, even if long Treasuries rally again. Testing the alternative confirmed why: re-evaluating every month adds roughly 0.7% a year in headline return and roughly doubles the 2000 to 2012 maximum drawdown, driven almost entirely by a single round trip through the late-2008 Treasury whipsaw. Duration is a regime call, not a monthly race. The lock clears on the first Risk On month.

How Global Navigator Holds

Global Navigator is a genuinely concentrated strategy, and this is structural rather than a quirk of the sample. Over 1980 through September 2026, it held a single ticker in 380 of 561 months, or 67.7%, and two tickers in the remaining months. It has never held three or more. The leveraged variants are more concentrated still at 73.8%, because leverage collapses the international pair into one position.

The only two-asset state that exists is the VXUS / DBEF pair, and that pair is set to 50/50 on entry and then left alone until it is exited. It is not reset monthly.

The reasoning is practical. Every other state in the strategy is 100% in one ticker, where rebalancing is a no-op by definition, so the international pair was the only rebalance that ever moved money. Those trades are not worth placing: the pair drifts a median of about half a percentage point from an even split, and only 12 of 181 international months have ever drifted more than five points. Resetting it every month generates about six small hand-placed trade instructions a year, each small enough that spread and rounding can exceed the benefit. Letting it drift removes 139 rebalances over 46 years, and in testing it changed performance by about two basis points, in the strategy's favor.

There is no drift band, deliberately. Unlike a multi-sleeve strategy where different assets compound at very different rates, this pair is one asset in two currency wrappers, so divergence is bounded by currency movement alone and self-limits.

Key Enhancement: Smart Leverage (Global Navigator 200 and 300)

The base Global Navigator is unleveraged. Two variants apply Smart Leverage to the equity sleeve:

• Global Navigator 200 substitutes a 2X S&P 500 position (SSO), for up to 200% notional exposure.
• Global Navigator 300 substitutes a 3X S&P 500 position (UPRO), for up to 300%.

Smart Leverage is opportunistic, not permanent. It arms only after U.S. large cap has fallen meaningfully from its peak, and it cannot arm and deploy in the same month. It deploys only once momentum has genuinely turned back up and the strategy actually wants to own U.S. large cap. It exits on a momentum reversal, on any Risk Off month, or at a hard 13-month cap.

Two design details are worth calling out:

One trigger, one deployment. When a deployment ends for any reason, the drawdown that armed it is spent. A fresh drawdown is required before leverage can be used again. The strategy does not re-lever on every momentum flip.

Prolonging the Magic. If the strategy rotates from U.S. to international while leverage is already deployed, the deployment survives and the leveraged position is held through the rotation. A regional rotation is not a reason to unwind a committed recovery position. The reverse is not true: a rotation to international while merely armed cancels the arm outright.

Leverage is applied to the single most liquid, best-understood exposure in the universe, during the specific conditions where recovery odds have historically been most favorable.

One exception is worth stating plainly rather than leaving in the Step 3 table above. Global Navigator and Global Navigator 200 hold an unleveraged defensive position throughout. Global Navigator 300 does not: in the first month of a defensive run, when the Treasury Duration Limiter has not yet fired, it holds TMF, a 3x long Treasury fund, in place of EDV. That exposure is bounded to a single month and disappears from month two onward, when all three variants hold unleveraged TLT, but within that month Global Navigator 300 carries three times the duration risk of the base strategy. See Global Navigator 300 for the full treatment.

Performance Highlights

January 1980 through September 2026, net of trading friction:

	CAGR	Max Drawdown	MAR
Global Navigator	+14.2%	-22.0%	0.65
Global Navigator 200	+17.5%	-21.8%	0.80
Global Navigator 300	+22.2%	-21.8%	1.02
S&P 500	+12.0%	-51.0%	0.24

Global Navigator and Global Navigator 200 share the same maximum drawdown, which tells you leverage was not deployed during the episode that produced it. Global Navigator 300's is about a point deeper, and that is the only place in the table where the cost of leverage is directly visible.

The S&P 500 row is the comparison that matters most. Global Navigator earned more per year over the period, but the difference in how it earned them is far wider than the difference in returns.

The pattern across the three variants is worth understanding rather than trusting. MAR improves as leverage rises, which is the opposite of what happens in the Triad family, because Global Navigator applies leverage to the whole portfolio only during recoveries the Risk On test has already validated and removes it on any Risk Off month. That is a favorable historical record, not a guarantee. A ratio improving is also not the same as the experience improving: the absolute experience of holding the 300 variant through a bad stretch is harder, not easier.

Portfolio Characteristics

• Highly concentrated. One holding about two-thirds of the time, two at most, never three. This is a feature of the design, not an accident of history, and it means month-to-month results can look nothing like a diversified portfolio's.
• Binary defensiveness. Unlike a multi-sleeve strategy that retreats in stages, Global Navigator is either fully invested or fully defensive. When it is wrong, it is wrong with the whole portfolio.
• Duration-aware defense. The Risk Off position is not a fixed bond allocation. TDL steps down to short duration when long duration is itself losing money, which is the specific failure mode that hurt conventional defensive allocations in 2022.
• Low trading frequency. Most months require no action. When the signal does change, it changes one position.
• Best suited to tax-deferred accounts. Worth being direct about. Positions are typically held for a matter of months, so realized gains are predominantly short term. The Smart Leverage cap was set at 13 months specifically so that a full-duration deployment clears the one-year holding period, but that is one position in one variant, not the general case. In a taxable account, plan accordingly.
• Fully mechanical. Every allocation follows from published rules with no discretionary override.
• Scalable. All positions are liquid, exchange-traded funds.

Who It's For

Global Navigator is designed for investors who want:

• Global equity exposure that follows leadership rather than fixing a split between regions.
• A clear, testable rule for stepping out of equities entirely, rather than riding a decline to the bottom.
• A defensive position that accounts for the possibility that bonds are the thing going wrong.
• Simplicity in execution, usually a single fund at a time.
• A rules-based process with no market-timing judgment calls.
• Optional tactical leverage during high-conviction recovery periods, via Global Navigator 200 or 300.

It is likely a poor fit for investors who need current income, who are uncomfortable holding one position at a time, who want risk to come off gradually rather than all at once, or who are investing in a taxable account and are highly sensitive to short-term capital gains. Global Navigator 300 in particular is not a starting point for anyone who has not held a leveraged position through a drawdown before.

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Past performance, including backtested results, is not indicative of future results. Backtested performance is hypothetical, does not reflect actual trading, and benefits from hindsight in the selection of strategy rules. Portions of the long-term history rely on reconstructed proxy data for funds that did not exist for the full period. Investors should carefully consider their risk tolerance and consult with a financial advisor.

For the latest details, visit www.DualMomentumSystems.com