Global Quantessentials Style: Has Momentum cracked?

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Global Quantessentials Style: Has Momentum cracked?

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Global Quantessential Style

Has Momentum cracked?

Beginning of the end, or a buying opportunity? 22 July 2026

After outperforming by 25% in three months, the global Momentum style has Quant Strategy

underperformed by -8.7% MTD and Risk has underperformed by -10.7%, prompting Global

investor to ponder whether Momentum has finally cracked. Indicators of the global cycle

remain strong. The signal from our economic regime indicator (the Global Wave) is

positive, the global earnings cycle is showing no signs of peaking, and our Global News

Pulse is the highest in eight-years. Although, monetary policy could be tightened, history

suggests multiple hikes may be required to slow the global cycle and tame inflation.

Therefore, it appears the pullback in Momentum and Risk is sentiment driven and may

present a buying opportunity for investors.

Nigel Tupper >>The extent of the style reversal in July Quant Strategist

In the first half of 2026, Momentum outperformed the MSCI AC World Index by +23.2%, Merrill Lynch (Australia)

Risk outperformed by 22.5%, while Quality underperformed by -5.7%. The 28.9% +61nigel.tupper@bofa.com2 9226 5735

performance spread between Momentum and Quality has reversed by 11.6% in the first Amar Vashi >>

three weeks of July as Momentum underperformed by -10.7% and Quality outperformed Quant Strategist

by 0.9%. The US reporting season may provide a glimpse into whether earnings for Merrillamar.vashi@bofa.comLynch (Australia)

Momentum stocks remain strong and trigger a switch back from Quality to Momentum. Sumuhan Shanmugalingam >>

Quant Strategist

Chart 1: Quantessential Styles Cumulative Relative Performance: Year-to-Date Merrill Lynch (Australia)

sumuhan.shanmugalingam@bofa.com