Markets

U.S. Momentum ETF (MTUM) Hits New 52-Week High

For investors seeking momentum, iShares MSCI USA Momentum Factor ETF MTUM is probably on radar. The fund just hit a 52-week high and is up about 65.8% from its 52-week low price of $88.83/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 on where it might be headed:

MTUM in Focus

MTUM provides exposure to large and mid-cap U.S. stocks exhibiting a relatively higher price momentum. Holding 125 stocks in its basket, it has key holdings in information technology, healthcare, consumer discretionary and communication. It charges 15 basis points in annual fees (see: all the Large Cap Growth ETFs here).

Why the Move?

The momentum corner of the broad U.S. stock market has been an area to watch given the soaring stocks. The S&P 500 and Nasdaq Composite Index reached new highs while the Dow Jones ended above 28,000 for the first time in six months. The latest rally is being driven by new developments in the coronavirus vaccine. Adding to the strength is the back-to-school season, which seems different this year with school outfits being replaced by technology gadgets.

More Gains Ahead?

It seems that MTUM might remain strong given a high weighted alpha of 27.80% and a low 20-day volatility of 16.29%. As a result, there is definitely still some promise for investors who want to ride on this surging ETF a little further.

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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.

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