Traders may trade on technical factors over the course of shifting market conditions, but Alpha Architect has come out with a smart beta exchange traded fund strategy with a built-in trend following component that helps weather a storm and still capture any potential upside.
On Wednesday, Alpha Architect rolled out the Alpha Architect Value Momentum Trend ETF (BATS: VMOT). VMOT has a 0.79% total expense ratio.
The Value Momentum Trend ETF tries to reflect the performance of the Alpha Architect Value momentum Trend Index, which utilizes a proprietary methodology developed by Empirical Finance, d/b/a Alpha Architect to select component holdings. The fund is also a fund-of-funds, so it primarily holds assets in shares of other ETFs.
VMOT will be primarily composed of the other Alpha Architect ETFs, including the ValueShares U.S. Quantitative Value ETF (BATS: QVAL), ValueShares International Quantitative Value ETF (BATS: IVAL), MomentumShares U.S. Quantitative Momentum ETF (BATS: QMOM) and MomentumShares International Quantitative Momentum ETF (BATS: IMOM).
A “momentum” investment style emphasizes investing in securities that have had better recent total return performance compared to other securities, whereas a “value” investment style emphasizes investing in securities that based on quantitative analysis are considered undervalue compared to other securities.