For investors seeking momentum, SPDR S&P 1500 Momentum Tilt ETF MMTM is probably on the radar. The fund just hit a 52-week high and is up 46.08% from its 52-week low price of $172.61/share.
But are more gains in store for this ETF? Let’s take a quick look at the fund and the near-term outlook on it to get a better idea of where it might be headed:
MMTM in Focus
The underlying S&P 1500 Positive Momentum Tilt Index applies an alternative weighting methodology to the S&P Composite 1500 Index so that stocks with relatively high momentum are overweight relative to the S&P 1500 Index and stocks with relatively low momentum are underweight. The product charges 12 bps in annual fees (See: All Cap Growth ETFs).
Why the Move?
The momentum corner of the broad U.S. stock market has been an area to watch given the Fed’s 50 bps rate cut in September. Momentum investing aims to capitalize on the continuance of an existing market trend. Market expectations of further rate cuts in November and December are a key tailwind for the fund, driving the current rally in the market.
More Gains Ahead?
Currently, MMTM has a Medium risk outlook. However, it might continue its strong performance in the near term, with a positive weighted alpha of 37.15 (as per Barchart.com), which gives cues of a further rally.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
