For investors seeking momentum, AGFiQ US Market Neutral Momentum Fund is probably on radar now. The fund just hit a 52-week high and is up 33.5% from its 52-week low price of $22.06/share.
But are more gains in store for this ETF? Let’s take a quick look at the fund and the near-term outlook on it to get a better idea on where it might be headed:
MOM in Focus
This fund provides exposure to a diversified portfolio of U.S. equities while seeking to provide long-term capital appreciation with lower volatility using embedded downside risk management to protect capital. It offers exposure to the “momentum” factor by investing long in U.S. equities that have had above average total returns and shorting those securities that have had below average total returns. MOM charges investors 55 bps in annual fees (see: all the Long/Short ETFs here).
Why the Move?
The long/short corner of the broad ETF world has been an area to watch lately, given that the coronavirus pandemic has resulted in a bloodbath in the stock market and raised the risk of global recession. This is because the fast-spreading novel coronavirus has taken a toll on economic activities worldwide, leading to suspension of professional sports games, cancelation of major events, conferences and conventions, prohibition of mass gatherings, travel bans and half-empty restaurants. All these have resulted in deteriorating fundamentals.
More Gains Ahead?
It seems that MOM might remain strong given a high weighted alpha of 32.80 but could be a risky choice as depicted by 20-day volatility of 26.83%. As a result, there is definitely still some promise for risk-aggressive investors who want to ride on this surging ETF.
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