Momentum ETFs Different
In momentum, however, the segment seems to be heavily dominated by one ETF, the iShares Edge MSCI USA Momentum Factor ETF (MTUM), which has nearly $4 billion in assets, and has attracted nearly five times as many assets this year as the second-most-popular momentum ETF.
Other large issuers such as Vanguard and Schwab don’t really have a presence in momentum-specific investing. State Street has one fund, the SPDR S&P 1500 Momentum Tilt ETF (MMTM), which has only $21 million in total assets.
In this segment, it’s PowerShares that has the biggest number of momentum funds—16—offering sector- and region-specific portfolios focused on momentum. They are all smaller, and some of these funds have actually seen net outflows in 2017.
A look at the biggest asset gatherers in this segment this year show a precipitous disparity in net inflows already in the top three, as you can see below.
Top Momentum ETFs In Asset Flows
- iShares Edge MSCI USA Momentum Factor ETF (MTUM); net inflows of $1.4 billion
MTUM looks for stocks with steady price increases. The fund tracks an index of large- and midcap U.S. stocks selected and weighted based on price appreciation over six- and 12-month periods, and low volatility over the past three years. Nearly 60% of the portfolio is tied to technology and financials. The fund has an expense ratio of 0.15%.
- PowerShares S&P Emerging Markets Momentum Portfolio (EEMO); net inflows of $307 million
EEMO offers investors the opportunity to capture momentum in emerging market stocks, with a portfolio that looks at 12-month stock price performance minus the most recent month, adjusting for volatility. The fund has $370 million in total assets gathered in more than five years. Also technology and financials heavy, EEMO costs 0.29%.
- Pacer Trendpilot 750 ETF (PTLC); net inflows of $91 million
PTLC tracks an index that toggles between U.S. large-cap stocks and three-month T-bills based on momentum. According to FactSet data, when the environment is risk-on, PTLC offers access to U.S. large-caps with a bias toward midcaps. Technology and financials are the fund’s largest sector bets at a combined 40% of the mix. The ETF has $547 million in total assets gathered in about two years.
Charts courtesy of StockChart.com
For a complete list of single factor ETFs, look at our Smart-Beta ETF channel.
Contact Cinthia Murphy at [email protected]