MarketDesk's systematic momentum exchange-traded fund, the Focused U.S. Momentum ETF (ticker: FMTM), has benefited from an early position in Madison Square Garden Sports Corp. (NYSE: MSGS) as the New York Knicks captured their first NBA championship since 1973. The fund's algorithm initiated a stake in MSGS in late February, well before the Knicks' playoff run began on April 18.
MSGS, which houses both the Knicks and the NHL's New York Rangers, has seen its share price more than double over the past year and climb 54% in the last six months to approximately $368. The stock is majority-controlled by James Dolan, whose family has a history of spinning off assets to unlock shareholder value.
In February, the MSGS board approved a plan to split the Knicks and Rangers into two distinct publicly traded companies. Although the transaction has not yet closed, the announcement triggered the algorithm's buy signal. “FMTM being an entirely data-driven systematic momentum fund started buying shares at the Knicks parent company all the way back in late February,” said MarketDesk managing director Jon Clements. “The algorithm is not reading a sports page, it's never watched a basketball game, but it noticed the momentum in the share price of the parent company. That momentum really is just information showing up in the price before it shows up in the headlines.”
FMTM is up roughly 30% year to date and 67% since its listing in March 2025. The fund, now trading around $42 per share, holds between 30 and 50 U.S. large- and mid-cap stocks selected by MarketDesk's quantitative model. As of June 12, FMTM owned 16,468 shares of MSGS, representing 3.41% of its portfolio, according to Stock Analysis.
Clements noted that the algorithm likely detected the value-unlocking potential of the planned split. “I think what the algorithm was picking up on all the way back in February was the announcement that the parent company is looking at splitting out the Knicks and the Rangers. Two separate franchises that the sum of the parts is probably more valuable than combined together,” he said. “Of course, having a world-renowned franchise like the Knicks win the NBA Finals only increases the team's value even further.”
The Dolan family has a track record of corporate divisions. James Dolan previously separated the Knicks and Rangers into MSGS, created Madison Square Garden Entertainment (MSGE) for venues like the Beacon Theater and Radio City Music Hall, and spun off the Las Vegas Sphere into Sphere Entertainment (SPHR) in 2023. Clements described this as a pattern of “unlocking value, because all of a sudden now you have two assets standalone that are worth more than fit together.”
FMTM's algorithm also bought The New York Times stock before Warren Buffett's Berkshire Hathaway disclosed a $350 million investment earlier this year. Additionally, it purchased Casey's General Stores (NASDAQ: CASY) and Coherent Corp. (NYSE: COHR) in March and April ahead of their inclusion in the S&P 500. The fund's average holding period is three to four months, with monthly turnover of 60% to 70%.
The Knicks' valuation stands at $10.1 billion, per CNBC estimates from February. For context, the Los Angeles Lakers sold for $10 billion in June 2024 to Guggenheim Partners CEO Mark Walter, setting a record for a controlling stake in a sports team. Advisors may note that systematic strategies like FMTM can capture such thematic moves without human bias, though they carry inherent turnover and concentration risks. For broader diversification, some advisors might consider sector-based approaches, as discussed in SpaceX IPO Fuels Single-Stock Frenzy, but State Street Advocates Sector ETF Diversification.
As the Knicks' championship boosts MSGS's profile, the planned split remains a catalyst. The Dolan family's history suggests further value-unlocking moves could follow, but the timing of any transaction is uncertain. Meanwhile, FMTM's algorithm continues to scan for momentum signals across markets, with the Knicks' run serving as a vivid example of how price action can precede news flow.
