Vanguard’s selection strategy
The investment strategy described in (NYSE:VFMO)'s prospectus is to target primarily U.S. common stocks (from the Russell 3000 Index) with strong recent performance, which have tended to earn a higher return than those with weak recent performance.
There was no evidence given why stocks with strong recent performance will earn a higher return going forward than those with a weaker recent performance.
The opposite applies: Bob Farrell’s rule 1 states: “Markets tend to return to the mean over time. When stocks go too far in one direction, they come back.”