Your Momentum ETF Is Really Just Low Volatility, But It’s Worked
- MTUM is very similar to USMV, a popular low-volatility ETF
- When market turns around, momentum may suffer: Jefferies
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An ETF that bets winning stocks will keep on winning has held up quite well amid the recent bout of market turbulence. One reason: it’s got many of the same traits of a popular low-volatility fund.
The iShares Edge MSCI USA Momentum Factor ETF, ticker MTUM, has a strong overlap with the minimum-volatility fund USMV, with both owning 68 of the same companies. That’s the biggest crossover between the two since at least January 2019, according to data compiled by Bloomberg Intelligence. Those stocks make up about three-quarters of the $9.6 billion momentum ETF.