- The Virtus Terranova U.S. Quality Momentum ETF was launched three months ago and follows a transparent strategy that screens stocks for momentum, then grades them based on three quality factors.
- I tested whether a momentum screen makes sense and found it to have marginally positive results, but occasionally results in an ultra-concentrated fund not suitable as a core holding.
- Unfortunately, the fund is ultra-concentrated today with over 50% allocated to Technology and Health Care stocks.
- I'm recommending investors wait until the index is reconstituted next, as a decrease in volatility among sectors should make the fund more diversified.
For further details see:
Virtus Terranova U.S. Quality Momentum ETF: Too Much Concentration Risk For Serious Consideration Today