- JOET introduces the concept of quality momentum, seeking to combine fundamental and technical analysis with a straightforward rules-based strategy. Fees are 0.29% annually and JOET has $83 million in AUM.
- This article will show why its application of the momentum screen is flawed. The Index calculates 12-month price momentum, but a 3-6 month period would better reflect market conditions.
- It's why JOET still has 20% exposure to Technology despite lagging Energy by 78% YTD. Exposure should reduce at the next reconstitution, just as the sector becomes attractive again.
- The Index also evaluates securities independent of their sector. The deck is stacked against Energy and Utilities, the two best-performers this year. As a result, performance is average at best.
- JOET has yet to prove itself, and since I don't trust it in volatile markets, I'm rating it as a sell.
For further details see:
JOET: Flawed Screens Doom This Quality Momentum ETF