iQ ETF Momentum Model

The ETF Momentum Model isn't confined to equity ETFs and may occasionally select bond, commodity, or currency ETFs.

INVESTMENT OBJECTIVE

The iQ ETF Momentum Model seeks to outperform the S&P 500 Index by selecting high-volume Exchange Traded funds based on a multi-factor process that focuses on technical and price momentum criteria.

RULES-BASED SELECTION PROCESS

The iQ ETF Momentum Model implements the following rules-based process:

  • Begin with a starting universe of all Exchange Traded Funds (“ETFs”) trading on United States exchanges.

    • Remove all leveraged ETFs.

  • Eliminate any Exchange Traded Fund whose previous month-end price is less than its 3-month simple moving average.

  • Sort the remaining ETFs by trading volume and select the top twenty-five.

  • Rank the remaining twenty-five ETFs by a multi-factor rating system that includes MPT Statistics, Technical Indicators and Price Momentum and select the top five.

The Model reconstitutes every February, May, August, & November.

A word about ETF momentum investing…

Investing in ETF momentum strategies can offer several potential benefits for advisors who are looking for a more active investment approach. Momentum investing is a strategy that involves investing in ETFs that have shown strong performance in the recent past, with the expectation that this strong performance will continue in the near future. Here are some reasons why investors might choose to invest in ETF momentum strategies:

1. Potential for Higher Returns: Momentum investing has the potential to generate higher returns than a passive investment approach, as it involves actively seeking out assets that have shown strong performance in the recent past.

2. Diversification: ETF momentum strategies can provide diversification benefits by investing in a broad range of assets that have demonstrated strong momentum. This can help reduce portfolio risk and potentially enhance returns by tapping into the growth potential of different asset classes.

3. Disciplined Investment Approach: Momentum investing involves following a disciplined investment approach that focuses on investing in assets with strong momentum and avoiding assets with weak momentum. This can help reduce emotional biases and prevent investors from making impulsive investment decisions.

4. Low Cost: ETF momentum strategies can be a low-cost investment option, as they typically have lower management fees than actively managed mutual funds. This can help improve overall investment returns by reducing the amount of fees that investors have to pay.

It's important to note that investing in ETF momentum strategies can also come with risks, such as market volatility, liquidity risks, and potential investment losses.

IMPORTANT! This is a non-diversified model that may hold multiple positions of the same index at any point in time.