Small-cap equities can capture broad market moves to the upside, but the FlexShares Morningstar US Market Factors Tilt Index Fund (TILT) also gives investors value, making it a steady riser through 2021.
The ETF hasn’t skipped a beat this year, rising to a 24% gain in a year marked by an economic recovery from the ongoing pandemic. Even with headwinds like rising yields, surging inflation, and new variants of COVID-19, TILT has maintained a steady climb higher.
TILT seeks investment results that correspond generally to the price and yield performance of the Morningstar® US Market Factor Tilt Index. The index is designed to reflect the performance of a selection of companies that, in aggregate, possess greater exposure to size and value factors relative to the Morningstar US Market Index, a float-adjusted market capitalization-weighted index of U.S.-incorporated large-, mid-, small-, and micro-capitalization companies.
“The FlexShares Morningstar U.S. Market Factor Tilt Index Fund (TILT) is intended to provide deep exposure to the investable U.S. equity universe while potentially providing investors a vehicle to track the performance of the broad U.S. equity market,” a FlexShares Fund Focus article explains.
“Strategic reweighting in the underlying index then is designed to provide a tilt toward the small-cap and value stocks that other market-weighted indices may have historically missed,” the Fund Focus adds. “The resulting fund seeks to reflect the experience of investing in the broad equity market, while reducing the risk of overconcentration in large-cap stocks and pursuing the excess return potential from the value and small size factors.”
Maintaining Momentum Through 2021
Looking at its YTD chart, it almost seems like a linear climb up. The question now is whether TILT can maintain its momentum, and technical indicators show that it just might.
Using the relative strength index (RSI), momentum still appears to be on its side with the reading below the overbought level. TILT has never really crossed below into oversold levels, explaining its linear-like move higher.
Currently, the fund is above its 50-day moving average, so near-term momentum looks sustainable. That can also be said for the long term with TILT above its 200-day moving average.
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