WisdomTree Launches Momentum Growth ETF
The firm’s betting on monthly reconstitutions.
WisdomTree dipped its toes into a new investing strategy with the launch of the WisdomTree U.S. Growth & Momentum Fund (WGRO) on Thursday. It’s the issuer’s first ETF to specifically combine these two factors.
The fund lists on the Nasdaq and carries a 0.55% expense ratio. As of noon Eastern Time on Thursday, it has a little over $1 million in assets under management.
WGRO follows an index produced by O’Neil Global Advisors that tracks stocks with more than $250 million in market capitalization and an average daily volume of more than $1 million for each of the trailing three months. The index is strongly weighted toward consumer discretionary and information technology stocks, with companies in those two sectors forming 55.5% of the holdings.
The index holds 50 to 100 companies selected using a methodology that considers long-term momentum and short-term mean reversion characteristics; volatility; growth characteristics; and “hotness,” or how a stock’s volume has changed relative to its historical averages. Reconstitutions occur monthly. The goal, according to the fund’s prospectus, is to identify low points in stocks that have a track record of strong long-term performance.
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