The value factor is again generating praise among investors and factor followers, but momentum is also proving sturdy this year. For example, the iShares MSCI USA Momentum Factor ETF (NYSEArca: MTUM) is up more than 9% year-to-date and is easily topping broader, cap-weighted equity indexes.

MTUM tracks large- and mid-cap U.S. stocks with relatively high price momentum. The underlying MSCI USA Momentum Index calculates the ratio of each stock’s price returns over the trailing 13 and seven months against volatility over the past three years. Companies are then weighted by their risk-adjusted momentum. MTUM was one of just a small number of ETFs to ascend to record highs during Thursday’s rally in U.S. stocks.

However, MTUM is among the many momentum ETFs that prove momentum can mean much more than just a high beta from a sexy sector. Momentum can also mean an emphasis on relative strength and strong price characteristics.

MTUM, which just turned four years old, has almost $2.5 billion in assets under management. Home to about 120 stocks, MTUM devotes over 39% of its weight to technology stocks. That is nearly triple the ETF’s second-largest sector weight which is 14.2% to healthcare. Consumer staples and consumer discretionary names combine for 19.7% of MTUM’s lineup.

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.

Supporting the ongoing growth in smart beta strategies, factors such as quality, momentum, value, size and minimum volatility have been drivers of returns across asset classes and helped shore up shortcomings of traditional market cap-weighted index funds.

Potential investors, though, should be aware that the momentum strategy typically works well under sustained market rallies and could breakdown during volatile conditions. Since defensive stocks typically do better during volatile conditions, the momentum strategy could load up on conservative picks and miss out on the initial recovery in riskier assets.

MTUM is not significantly more volatile than mainstream large-cap indexes. In fact, MTUM’s three-year standard deviation of 9.8% is below the same metric on the S&P 500.

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