Summary
QMOM Chart
QMOM: A High-Turnover, Concentrated Momentum ETF
Alpha Architect U.S. Quantitative Momentum ETF offers a high-conviction, actively managed momentum strategy with a distinct, pro-cyclical sector mix. QMOM is heavily overweight industrials and basic materials, underweight technology and financials, resulting in low correlation with major indexes and peers. The fund trades at a 26.2x P/E premium, driven by high-growth, low-profitability holdings, but has a history of elevated volatility and underperformance.
QMOM Is Struggling, Consider Other Options
Momentum investing remains attractive, but choosing the right ETF is critical, due to varying risk and return profiles. I rate Alpha Architect U.S. Quantitative Momentum ETF as a Hold; its quantitative approach and frequent rebalancing lead to underperformance, high risk, and low momentum compared to peers. SPMO and MTUM offer stronger returns, lower risk, and better exposure to leading large-cap stocks, making them superior alternatives for momentum investing.
QMOM: Compelling For Swing-Trading, Not For The Long Term
The Alpha Architect U.S. Quantitative Momentum ETF holds 50 trending stocks, with a focus on mid-caps, consumer discretionary and industrials. Despite outperforming in certain periods, QMOM has lagged the Russell 1000 benchmark and key competitors since its inception in 2015. QMOM's volatility may benefit swing traders, but it lacks long-term attractiveness even within the momentum ETF category.
Alpha U.S. Quantitative Momentum ETF Investors
| Name | Quantity | Cost | Value | Profit ($) | Gain (%) |
|---|---|---|---|---|---|
| LJB Laura J. Bornheimer GWN SECURITIES Inc. | 4,725 | $289,210.19 | $349,957.12 | $60,746.93 | 21% |
| XPN XY Planning Network Inc. XY Planning Network Inc. | 18,721 | $1.16M | $1.43M | $260,713.43 | 22.38% |
| WB William Bromley Innova Wealth Partners | 16,322 | $1.09M | $1.24M | $150,119.46 | 13.74% |
| KMT Kirk M. Tokheim Ameritas Advisory Services LLC | 4,332 | $285,876.84 | $325,679.76 | $39,802.92 | 13.92% |
 Daniel Guy Ethos Financial Group LLC | 71,706 | $4.54M | $5.36M | $822,892.93 | 18.13% |
Alpha U.S. Quantitative Momentum ETF (QMOM) FAQ
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Alpha U.S. Quantitative Momentum ETF Profile
| NASDAQ (NMS) Exchange | US Country |
Overview
The company described employs a sophisticated, quantitative approach to investing, focusing on a momentum-investing strategy. This approach identifies equity securities showing significant potential for growth based on their recent performance. By leveraging a multi-step, rules-based methodology, the company aims to construct a portfolio of 50 to 200 equity securities. These securities are chosen for their superior momentum – a measure of their recent total return performance relative to their peers. The investment strategy is refined through proprietary screens, designed to exclude companies potentially facing challenges that could deter their momentum. Additionally, the company reserves the flexibility to allocate a portion of its assets to cash, cash equivalents, and other investment vehicles to manage risk and seize opportunities beyond its primary focus on equity securities with high momentum.
Products and Services
- Equity Portfolio Management:
The core service offered revolves around managing a portfolio of 50 to 200 equity securities. These securities are selected based on a quantitative, rules-based methodology that focuses on identifying high-momentum stocks. The aim is to capitalize on the trend that securities which have performed well in the recent past will continue to perform well in the short to medium term.
- Proprietary Screening:
A key aspect of the company's strategy is the use of proprietary screening processes. This service is critical for identifying and eliminating from consideration any companies that might have underlying issues potentially impeding their momentum. This precaution helps in refining the selection of securities to ensure a robust portfolio aligned with the momentum investing strategy.
- Alternative Investments:
Recognizing the importance of diversification and risk management, the company also offers the option to invest up to 20% of its assets in cash and cash equivalents, other investment companies, and various securities and instruments. This flexible approach allows the company to adapt to market changes, manage risk more effectively, and potentially enhance returns by investing outside the primary focus on high-momentum equity securities.
