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ETF Specialist

Momentum for Asset Allocation

This ETF uses offensive and defensive momentum signals for tactical asset allocation.

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A version of this article was published in the February 2019 issue of Morningstar ETFInvestor. Download a complimentary copy of Morningstar ETFInvestor by visiting the website.

Momentum is one of the most pervasive forces in financial markets. It has been observed in nearly every market studied. While targeting assets with strong recent performance appears to have been a winning strategy on paper, there are challenges with putting it into practice. It requires high turnover, which can be a lot of work for do-it-yourself investors and can lead to high transaction costs and poor tax efficiency.

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Alex Bryan does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.