While the Olympics are in full swing this week, the markets have been hitting new gold medals all year with all-time highs it seems week after week. However, there is a new variant in town and it is causing some major concerns economically around the world. Most recently in Wuhan, there was a state-wide lockdown and mass testing to find and quash the new spread of the Covid-19 Delta variant. Whether Western countries will have to follow that lead is yet to be seen, but the “wall of worry” is certainly building at this point. Reopening stocks such as airlines and cruise lines fell in early trading, limiting some upside from the rest of the market. We highlight smart beta ETFs every week, and this week we are highlighting the top US Momentum Smart Beta ETFs. Q.ai’s deep learning algorithms have identified several ETFs based on fund flows over the last 90-days, 30-days, and 7-days. We have recognized 1 ETF rated as “Best,” 1 ETF rated as “Good,” 1 ETF rated as “Caution,” 2 ETFs rated as “Poor,” and one final ETF rated as “Worst.”
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Alpha Architect US Quantitative Momentum ETF (QMOM)
We have one “Best” rated US Momentum ETF this week in the Alpha Architect US Quantitative Momentum ETF. The ETF’s goal is to buy stocks with the highest quality momentum factors based on their proprietary strategies. The ETF is smaller-sized with $110,455,200.00 AUM. It has seen negative fund flows over the last 90-days with an outflow of -$12,950,300.00. Its net expense ratio is on the higher side and most expensive this week at 0.79%.
Vanguard US Momentum Factor ETF (VFMO)
The Vanguard US Momentum Factor ETF is our only “Good” rated ETF this week. The ETF uses a rules-based quantitative model to evaluate U.S. common stocks, to invest in stocks with strong recent performance. The ETF is smaller-sized on this week’s list with $103,105,650.00 AUM. It has seen positive fund flows, with a 90-day fund flow of $39,958,100.00, a 30-day fund flow of $30,862,050.00, and 1-week fund flow of $32,906,850.00. Its net expense ratio of 0.13% is the cheapest this week.
Invesco DWA SmallCap Momentum ETF (DWAS)
We have one “Caution” rated ETF this week in the Invesco DWA SmallCap Momentum ETF. The ETF is for those looking for exposure to the Dorsey Wright SmallCap Technical Leaders Index. The ETF is medium-sized, with $492,612,389.40 AUM. It has seen negative fund flows as of late, with a fund flow over the last 90 days of -$19,876,448.10, a 30-day fund flow of -$18,015,903.40, and a 1-week fund flow of -$5,856,927.30. Its net expense ratio of 0.60% is on the higher side.
iShares Edge MSCI USA Momentum Factor ETF (MTUM)
The iShares Edge MSCI USA Momentum Factor ETF is the first “Poor” rated ETF this week. The ETF seeks to track the performance of an index that measures the performance of U.S. large- and mid-capitalization stocks exhibiting relatively higher momentum characteristics. The ETF is the largest on our list this week with $14,723,824,555.00 AUM. It has seen negative fund flows, with a 90-day fund flow of -$589,883,780.00, and a 30-day fund flow of -$962,544,375.00, and a 1-week fund flow of -$166,361,415.00. The ETFs net expense ratio of 0.15% is the second cheapest for this week’s list.
SPDR Russell 1000 Momentum Focus ETF (ONEO)
The next ETF on our list is our first “Poor” rated ETF in the SPDR Russell 1000 Momentum Focus ETF. The ETF’s specific focus on momentum potentially captures the excess returns of stocks that have enjoyed higher recent price performance compared to other securities due to the tendency for stock prices to form trends over certain time horizons. The ETF is right in the middle in terms of size this week with $281,915,216.03 AUM. It has seen positive fund flows with a 90-day fund flow of $21,935,002.51. Its net expense ratio of 0.2% is quite attractive.
Invesco DWA Momentum ETF (PDP)
The Invesco DWA Momentum ETF is our only U.S. Momentum Smart Beta ETF rated Worst this week. This ETF is based on the Dorsey Wright Technical Leaders Index. It is the second largest this week in terms of AUM with $1,797,739,134.00 AUM. Its fund flows have been mixed, with a 90-day fund flow of -$59,405,228.70, a 30-day fund flow of $21,742,989.80, and a 1-week fund flow of -$20,112,378.90. With a net expense ratio of 0.63%, it is middle of the pack in terms of cost this week.
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