BROOMALL, Pa.--(BUSINESS WIRE)--Alpha Architect today announced that it has launched its fifth proprietary index fund, the Alpha Architect Value Momentum Trend ETF (Ticker: VMOT) with a zero management fee.1
VMOT is a fund of funds ETF that seeks to track the Alpha Architect Value Momentum Trend Index (“Index”), which seeks to capture (1) focused value and momentum factor premiums and (2) follows a proprietary trend-following algorithm that seeks to avoid downtrending markets against extreme losses. The Index seeks to mitigate extreme market drawdowns, while capturing focused value and momentum exposures.
Dr. Wes Gray, founder of Alpha Architect, is excited for the Fund’s prospects: “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.”
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.
With zero sales representatives and a “disdain for flash” culture, Alpha Architect has raised $180M in ETF assets in under three years. Their overall asset base has grown from $30M in 2012 to over half a billion (managed accounts and ETFs) to date.
Dr. Wesley Gray and Dr. Jack Vogel, co-CIOs of Alpha Architect, started developing their Value Momentum Trend Index soon after they completed development of their Quantitative Value algorithm and Quantitative Momentum algorithms.
VMOT joins a small number of boutique ETFs that offer trend-following exposure inside of an ETF structure. When trend-following signals “break,” the fund will short domestic and international market exposures and move to a protection seeking stance.
Dr. 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 downtrending markets. For disciplined investors looking to access multiple factor premiums in one package, VMOT may be a compelling product.”
VMOT may be best suited for investors and advisors that want focused factor exposures paired with trend-following overlays.
ABOUT ALPHA ARCHITECT VALUE MOMENTUM TREND ETF (VMOT)
Alpha Architect Value Momentum Trend ETF is advised by Alpha Architect, an SEC-registered investment firm that seeks to design affordable, tax-efficient, index strategies for Exchange-Traded Funds and Separately Managed Accounts. Alpha Architect’s strategies are rooted in the science of behavioral finance with a goal of beating behavioral bias. For further information, visit www.alphaarchitect.com/funds.
DISCLOSURE
Investments involve risk. Principal loss is possible. Redemptions are limited and often commissions are charged on each trade. Because the Fund is non-diversified, it may be more sensitive to economic, business, political or other changes affecting individual issuers or investments than a diversified fund, which may result in greater fluctuation in the value of the Fund’s Shares and greater risk of loss. Unlike mutual funds, ETFs may trade at a premium or discount to their net asset value.
The Securities and Exchange Commission (SEC) does not approve or disapprove of any investment. This material has been distributed for informational purposes only and should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. Information contained herein has been obtained from sources believed to be reliable, but not guaranteed. No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission.
Value investing is subject to the risk that intrinsic values of investments may not be recognized by the broad market or that their prices may decline. Investments utilizing quantitative methods may perform differently than the market as a result of characteristics and data used and changes in trends. Momentum investing is subject to the risk that past performance does not predict the future performance of investments. Investments in foreign securities involve political, economic and currency risks, greater volatility and differences in accounting methods. While hedging strategies can be very useful and inexpensive ways of reducing risk, they are sometimes ineffective due to unexpected changes in the market. Hedging also involves the risk that changes in the value of the related security or basket of securities will not match those of the instruments being hedged as expected, in which case any losses on the instruments being hedged may not be reduced. The Funds are not actively managed. Maintaining investments regardless of market conditions or the performance of individual investment could cause the fund’s return to be lower than if the fund employed an active strategy. The performance of the Fund and its Index may differ due to tracking error.
Because it invests primarily in other funds, the Fund’s investment performance largely depends on the investment performance of those underlying Alpha Architect ETFs. An investor will indirectly bear the principal risks and its share of the fees and expenses of the underlying funds. Derivatives can be volatile and involve various types and degrees of risks including hedging risk. The use of derivatives in connection with the Index’s hedging strategies may expose the Index (and therefore the Fund) to losses (some of which may be sudden) that it would not have otherwise been exposed to if it had only invested directly in equity securities.
The Fund is distributed by Quasar Distributors, LLC. Fund's investment advisor is Empowered Funds, LLC which is doing business as Alpha Architect.
The fund’s investment objectives, risks, charges and expenses must be considered carefully before investing. The statutory and summary prospectus contains this and other important information about the investment company, and it may be obtained by calling 215-882-9983 or visiting www.alphaarchitect.com/funds. Read it carefully before investing.
1 Other fees and expenses will apply to an investment in the fund. The fund’s gross expense ratio is 1.24% and the net expense ratio is 0.79%. The net expense ratio represents the percentage applicable to investors. The Fund’s investment adviser has contractually agreed to waive its management fee of 45 basis points (0.45%) for the Fund until at least November 11, 2018. This agreement may be terminated only by, or with the consent of, the Fund’s Board of Trustees.
