Typically, momentum funds are heavy on technology and consumer discretionary stocks. FDMO obliges on that front as technology is its largest sector allocation at 24%. Healthcare, financial services and consumer discretionary names combine for about 40% of the fund’s roster.
The momentum strategy basically bets that hot movers will continue to rise, so investors would buy high and sell even higher. Investors who want to follow this momentum strategy will be betting on outperforming sectors flying even higher.
FDMO charges 0.29% per year, or $29 on a $10,000 investment. That places the ETF favorably among comparable momentum smart beta strategies.
For more on Smart Beta ETFs, visit the Smart Beta Channel home page.