The New York Knicks finally ended their 53-year championship drought, and with it, Madison Square Garden Sports Corp. (MSGS) has been thrust back into the spotlight. But one momentum-focused ETF says the market had already figured out the opportunity long before the final buzzer.

The MarketDesk Focused U.S. Momentum ETF (FMTM) added MSGS to its portfolio during its February rebalance — months before the Knicks' playoff run even started. According to Jon Clements, managing director at MarketDesk, the decision wasn't about basketball. It was about math.

A Data-Driven Bet, Not a Basketball Bet

"The selection was entirely data-driven," Clements told MarketDash. "Each month FMTM ranks our universe on a momentum signal that emphasizes the consistency and quality of a stock's six-month price trend, not just the size of its return."

He said MSGS qualified because it exhibited "strong, stable, persistent price strength," adding that the model "takes no sports inputs; it reads price."

Instead of factoring in the Knicks' roster or playoff odds, the momentum signal captured growing investor interest in Madison Square Garden Sports' plan to separate the Knicks and Rangers into two publicly traded companies.

"What the price was reflecting was the company's announced plan to separate the Knicks and Rangers into two public companies, a sum-of-the-parts catalyst that was drawing buyers well before the Finals run," Clements said.

Price, Not Narrative, Drives the Model

Asked how the strategy differentiates between a short-lived news rally and sustainable momentum, Clements said the model deliberately ignores the underlying narrative.

"We don't separate the two, because the model only sees price. It's agnostic to the 'why,'" he said.

Instead, FMTM evaluates the consistency of a stock's upward trend rather than simply measuring its return over six months.

"Two stocks can both be up 30% over six months — one that climbed steadily, one that spiked in a single week. Our signal favors the steady climber because a persistent trend is more likely to continue than a sharp move that may already have run its course."

Championship Added to an Existing Investment Thesis

While the Knicks' title boosted the investment case, Clements said it wasn't the catalyst that initially brought MSGS into the portfolio.

"The proposed separation of the Knicks and Rangers is the structural value story — two franchises potentially worth more apart than together," he said. "The deep playoff run, capped by the championship, adds to that by raising the franchise's valuation and visibility. The corporate catalyst is what the momentum signal initially picked up; the on-court success layered on top of it."

Despite MSGS' strong performance, Clements noted that FMTM doesn't make concentrated bets on individual stocks. The actively managed ETF equally weights roughly 30 holdings, with each position accounting for about 3% of the portfolio.

"We don't run high-conviction single-stock bets," he said. "A position earns its place by the strength of the signal, not by how we feel about the story behind it or the market cap size of the company."

Momentum Opportunities Expanding Beyond AI

While AI-related technology companies continue to dominate momentum strategies, Clements said leadership is beginning to broaden across the market.

"We're seeing both," he said. "AI and mega-cap tech have clearly led, and that shows up in the portfolio, but we're also seeing opportunities outside tech, particularly in industrials and financials, benefiting from a broadening market and the expansion of U.S. manufacturing activity."

MSGS, he added, illustrates how the firm's quantitative process can uncover opportunities outside the technology sector by focusing solely on durable price trends.

The Bigger Lesson From the Knicks

For Clements, the Knicks' championship isn't a case for investing in sports franchises. Instead, he sees it as evidence that systematic momentum strategies can identify opportunities before they're widely recognized.

"It's about systematic momentum," he said. "The real takeaway is that a stock's price contains a great deal of information that isn't always visible to someone looking at the company directly, and that information gets reflected in the price quickly."

He pointed to previous examples in which FMTM held companies before Berkshire Hathaway investments became public or before the stocks were added to the S&P 500, arguing MSGS is simply the latest example.

"The lesson isn't 'buy sports teams,'" Clements said. "It's that price is information, and a rules-based process can act on it before the headline catches up."