Alpha Architect has launched the Alpha Architect Value Momentum Trend ETF (Bats: VMOT), a fund of funds targeting the returns offered by value and momentum factor premiums in US and international equity markets.
The Alpha Architect Value Momentum Trend ETF seeks to capture the returns attributable to value and momentum factor premiums, while utilizing a trend-following overlay.
The ETF is the fifth fund from Alpha Architect to track a proprietary index developed in-house by the firm’s indexing division. The underlying Alpha Architect Value Momentum Trend Index utilizes a trend-following algorithm that seeks to avoid down-trending markets, thereby protecting against significant losses.
Wes Gray, founder of Alpha Architect, commented: “We see a great opportunity to provide investors with a unique type of alternative exposure. VMOT provides exposures to what we believe to be the most robust factor premiums: value, momentum, and trend.”
Alpha Architect’s existing line-up of ETFs, which collectively make up the eligible investment universe for VMOT, are listed below:
Alpha Architect US Quantitative Value ETF (QVAL)
Alpha Architect International Quantitative Value ETF (IVAL)
Alpha Architect US Quantitative Momentum ETF (QMOM)
Alpha Architect International Quantitative Momentum ETF (IMOM)
VMOT will hold the four flagship funds of Alpha Architect (QVAL, QMOM, IMOM, and IVAL) and also deploy a trend following system overlay, all for zero management fees beyond the underlying ETF expense ratios of 0.79%.
When trend-following signals “break,” the fund will short domestic and international market exposures and move to a protection seeking stance, using derivatives.
Gray continued, “We seek to deliver a high-conviction value/momentum approach backed by extensive academic and market research and a substantive knowledge of the manner in which irrational investor behavior creates mispricing. With VMOT, we can now give our investors access to this strategy, while simultaneously providing a mechanism that seeks to avoid down-trending markets. For disciplined investors looking to access multiple factor premiums in one package, VMOT may be a compelling product.”