New ETF Targets Momentum & Quality

Yesterday, Virtus rolled out an ETF targeting the two best-performing factors of 2020. The Virtus Terranova U.S. Quality Momentum ETF (JOET) draws its securities from the largest 500 stocks listed on U.S. markets and then evaluates them based on their exposure to the quality and momentum factors.

JOET comes with an expense ratio of 0.29% and lists on the Nasdaq stock exchange.

The fund tracks an index provided by Indxx that starts with the 500 largest stocks in the U.S. From there it scores those companies based on quality and momentum, selecting the top 250 securities based on the momentum criteria of the last 12 months’ total return. Quality is evaluated using return on equity, debt-to-equity ratio and sales growth rate, with the highest-scoring 125 securities selected from the momentum-screened pool to create the final index, the prospectus says.

Components are equally weighted, and rebalances and reconstitutions occur quarterly, according to the document.

Virtus Senior Managing Director and Chief Market Strategist Joe Terranova is the driving force behind the fund, which represents strategies he has used in his lengthy career as a financial professional.  

“An essential component for building long-term growth is maintaining discipline and identifying high-conviction investment opportunities for portfolio allocation and diversification,” he said.

“Throughout my career, I have determined that high-conviction investment opportunities are rooted in both quality fundamental strength and positive technical momentum trends,” Terranova added.

Virtus Investment Partners currently has 12 ETFs trading on U.S. markets, but JOET appears to be its first factor-driven fund.  

Contact Heather Bell at [email protected]