Entering text into the input field will update the search result below

Momentum Factor Still Leads After Surge In Market Volatility

Mar. 06, 2018 7:28 PM ETMTUM, QUAL, SPY1 Comment
James Picerno profile picture
James Picerno

The US stock market this year has taken investors on a white-knuckled ride, but the momentum factor's performance leadership has remained a constant in the US equity factor space, based on a set of proxy ETFs.

For year-to-date performance through yesterday's close (March 5), the iShares Edge MSCI USA Momentum Factor ETF (MTUM) remains the clear leader. Indeed, MTUM's 6.3% return so far this year is well above the rest of the field, which reflects a mixed set of modest gains and losses.

MTUM's year-to-date edge is also decisive versus the broad equity market. The SPDR S&P 500 Trust ETF (SPY) is up a respectable 2.0% this year through Monday, but that's no match for MTUM's year-to-date performance.

MTUM remains the dominant performer for the one-year change too. The fund is currently posting a sizzling 35.7% total return. The next-strongest one-year return is a distant 16.5% gain for iShares Edge MSCI USA Quality Factor ETF (QUAL), which is fractionally ahead of the broad market's 16.4% one-year advance based on SPY.

Momentum's edge can't last forever, but at the moment there's no sign that MTUM's strong run in relative and absolute terms is faltering. Weakness in the broad equity market could derail momentum's leadership in the factor space, but yesterday's rally in the S&P 500 suggests that the crowd's bullish sentiment still has room to run.

Even a relatively sharp pullback in MTUM would leave the ETF far ahead of its factor competitors. As the performance chart below reminds, MTUM's rally over the past year (black line at the top) has been extraordinarily powerful compared with other factor ETFs.

This article was written by

James Picerno profile picture
James Picerno is a financial journalist who has been writing about finance and investment theory for more than twenty years. He writes for trade magazines read by financial professionals and financial advisers. Over the years, he’s written for the Wall Street Journal, Barron’s, Bloomberg Markets, Mutual Funds, Modern Maturity, Investment Advisor, Reuters, and his popular finance blog, The CapitalSpectator. Visit: The Capital Spectator (www.capitalspectator.com)

Recommended For You

To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.