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Momentum ETFs to Play on Coronavirus Vaccine Hopes
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Wall Street is again showing optimism on encouraging data from one more vaccine developer, AstraZeneca (AZN), which is working in collaboration with the University of Oxford. The Dow Jones Industrial Average rose 1.1% on Nov 23. The S&P 500 was up 0.6% and the Nasdaq Composite increased 0.2% on the same day.
There was one more factor stimulating market optimism. The 30-stock average, Dow Jones, touched its session high in the final trading hours. President-elect Joe Biden’s plans to nominate previous Federal Reserve Chair Janet Yellen for Treasury secretary has led this optimism wave. Going by a CNBC article, Yellen is known for an impressive run during her tenure as Fed chair from 2014 to 2018. During that period, the S&P 500 gained about 60% along with low rates.
In this regard, Alli McCartney of UBS Wealth Management has said that Yellen “is a big name, with significant experience highlighted by her time at the Fed,” per a CNBC article.
Positive Vaccine Data Keep Pouring
AstraZeneca has announced that an interim analysis of clinical trials reflected that its coronavirus vaccine delivered an average efficacy of 70% in protecting against coronavirus, per a CNBC article. Notably, the vaccine was evaluated over two different dosing schedules. Going on, one dosing regimen displayed an effectiveness of 90% when trial participants were administered a half dose, followed by a full dose in the gap of at least one month. The other delivered 62% efficacy when two full doses were administered, at least in the gap of a month.
Another frontrunner in the coronavirus vaccine race — Moderna (MRNA) — has come up with encouraging study data relating to mRNA-1273. National Institutes of Health -appointed Data Safety Monitoring Board (DSMB) for the Phase 3 study of mRNA-1273 has informed Moderna that with a vaccine efficacy of 94.5%, the trial has met the pre-mentioned statistical parameter in the study protocol for efficacy. Notably, the aforesaid study, which is known as the COVE study, is being conducted in association with the National Institute of Allergy and Infectious Diseases (NIAID). It enrolled more than 30,000 participants in the United States.
Pfizer Inc. (PFE) and BioNTech SE (BNTX) have again come up with encouraging updates regarding their coronavirus vaccine candidate, BNT162b2. Notably, BNT162b2 has been found to meet all of the ongoing Phase 3 study’s primary efficacy endpoints post the final efficacy analysis. The data reflects a vaccine efficacy rate of 95% (p<0.0001) in study participants without prior SARS-CoV-2 infection (first primary objective) and also in participants with and without prior SARS-CoV-2 infection (second primary objective), which were measured seven days after the second dose in both cases.
Both companies currently project to manufacture up to 50 million vaccine doses globally in 2020 and up to 1.3 billion doses by the end of 2021.
Momentum ETFs in Focus
Momentum investing looks to fetch profits from hot stocks that have shown an uptrend over the past few weeks or months. Here we present five ETFs that could outperform on the current market optimism. Further, these could beat broader market returns in the coming months if the optimism prevails.
This fund provides exposure to large and mid-cap stocks that exhibit relatively higher price momentum by tracking the MSCI USA Momentum SR Variant Index. It charges 15 bps in fees per year and is a popular choice, with AUM of $12.14 billion (read: Value or Growth: Which ETFs to Play Ahead?).
This fund tracks the Dorsey Wright Technical Leaders Index, which measures the performance of companies that demonstrate powerful relative strength characteristics. It has amassed $1.88 billion in its asset base and charges 62 bps in annual fees (read: ETF Strategies to Gain From US Market Optimism).
This ETF follows the S&P Midcap 400 Momentum Index, which is designed to identify mid-cap firms with the highest momentum scores. XMMO has AUM of $765.2 million and an expense ratio of 0.34%.
VictoryShares USAA MSCI USA Value Momentum ETF (ULVM - Free Report)
This fund tracks the MSCI USA Select Value Momentum Blend Index, offering exposure to large and mid-cap companies with higher exposure to value and momentum factors, while maintaining a moderate turnover and lower realized volatility compared with the traditional capitalization weighted indices. It accumulated $492.8 million in AUM and charges 0.20% in expense ratio.
With AUM of $238 million, this product targets large-cap securities with a combination of core factors (high value, high quality and low size characteristics) and a focus factor comprising high momentum characteristics. It follows the Russell 1000 Momentum Focused Factor Index and charges an annual fee of 20 bps (read: 2 New Factor-Based ETFs to Endure the Current Volatile Market).
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Momentum ETFs to Play on Coronavirus Vaccine Hopes
Wall Street is again showing optimism on encouraging data from one more vaccine developer, AstraZeneca (AZN), which is working in collaboration with the University of Oxford. The Dow Jones Industrial Average rose 1.1% on Nov 23. The S&P 500 was up 0.6% and the Nasdaq Composite increased 0.2% on the same day.
There was one more factor stimulating market optimism. The 30-stock average, Dow Jones, touched its session high in the final trading hours. President-elect Joe Biden’s plans to nominate previous Federal Reserve Chair Janet Yellen for Treasury secretary has led this optimism wave. Going by a CNBC article, Yellen is known for an impressive run during her tenure as Fed chair from 2014 to 2018. During that period, the S&P 500 gained about 60% along with low rates.
In this regard, Alli McCartney of UBS Wealth Management has said that Yellen “is a big name, with significant experience highlighted by her time at the Fed,” per a CNBC article.
Positive Vaccine Data Keep Pouring
AstraZeneca has announced that an interim analysis of clinical trials reflected that its coronavirus vaccine delivered an average efficacy of 70% in protecting against coronavirus, per a CNBC article. Notably, the vaccine was evaluated over two different dosing schedules. Going on, one dosing regimen displayed an effectiveness of 90% when trial participants were administered a half dose, followed by a full dose in the gap of at least one month. The other delivered 62% efficacy when two full doses were administered, at least in the gap of a month.
Another frontrunner in the coronavirus vaccine race — Moderna (MRNA) — has come up with encouraging study data relating to mRNA-1273. National Institutes of Health -appointed Data Safety Monitoring Board (DSMB) for the Phase 3 study of mRNA-1273 has informed Moderna that with a vaccine efficacy of 94.5%, the trial has met the pre-mentioned statistical parameter in the study protocol for efficacy. Notably, the aforesaid study, which is known as the COVE study, is being conducted in association with the National Institute of Allergy and Infectious Diseases (NIAID). It enrolled more than 30,000 participants in the United States.
Pfizer Inc. (PFE) and BioNTech SE (BNTX) have again come up with encouraging updates regarding their coronavirus vaccine candidate, BNT162b2. Notably, BNT162b2 has been found to meet all of the ongoing Phase 3 study’s primary efficacy endpoints post the final efficacy analysis. The data reflects a vaccine efficacy rate of 95% (p<0.0001) in study participants without prior SARS-CoV-2 infection (first primary objective) and also in participants with and without prior SARS-CoV-2 infection (second primary objective), which were measured seven days after the second dose in both cases.
Both companies currently project to manufacture up to 50 million vaccine doses globally in 2020 and up to 1.3 billion doses by the end of 2021.
Momentum ETFs in Focus
Momentum investing looks to fetch profits from hot stocks that have shown an uptrend over the past few weeks or months. Here we present five ETFs that could outperform on the current market optimism. Further, these could beat broader market returns in the coming months if the optimism prevails.
iShares MSCI USA Momentum Factor ETF (MTUM - Free Report)
This fund provides exposure to large and mid-cap stocks that exhibit relatively higher price momentum by tracking the MSCI USA Momentum SR Variant Index. It charges 15 bps in fees per year and is a popular choice, with AUM of $12.14 billion (read: Value or Growth: Which ETFs to Play Ahead?).
Invesco DWA Momentum ETF (PDP - Free Report)
This fund tracks the Dorsey Wright Technical Leaders Index, which measures the performance of companies that demonstrate powerful relative strength characteristics. It has amassed $1.88 billion in its asset base and charges 62 bps in annual fees (read: ETF Strategies to Gain From US Market Optimism).
Invesco S&P MidCap Momentum ETF (XMMO - Free Report)
This ETF follows the S&P Midcap 400 Momentum Index, which is designed to identify mid-cap firms with the highest momentum scores. XMMO has AUM of $765.2 million and an expense ratio of 0.34%.
VictoryShares USAA MSCI USA Value Momentum ETF (ULVM - Free Report)
This fund tracks the MSCI USA Select Value Momentum Blend Index, offering exposure to large and mid-cap companies with higher exposure to value and momentum factors, while maintaining a moderate turnover and lower realized volatility compared with the traditional capitalization weighted indices. It accumulated $492.8 million in AUM and charges 0.20% in expense ratio.
SPDR Russell 1000 Momentum Focus ETF (ONEO - Free Report)
With AUM of $238 million, this product targets large-cap securities with a combination of core factors (high value, high quality and low size characteristics) and a focus factor comprising high momentum characteristics. It follows the Russell 1000 Momentum Focused Factor Index and charges an annual fee of 20 bps (read: 2 New Factor-Based ETFs to Endure the Current Volatile Market).
Want key ETF info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week. Get it free >>