Alpha Architect Goes International With New Momentum ETF

Registered investment advisory firm Alpha Architect, expanded its lineup of quantitative exchange traded funds this week with the debut of the issuer's second international ETF, the International Quantitative Momentum ETF IMOM.

“IMOM joins a small number of concentrated, active, and momentum-based ETFs currently in the marketplace. IMOM may invest in securities and depository receipts of companies in any industry and with any market capitalization. The Fund will invest in approximately 50 of the top international equity securities as determined by its Quantitative Momentum system,” according to a statement issued by Pennsylvania-based Alpha Architect. 

Alpha Architect's other ETFs are the MomentumShares U.S. Quantitative Momentum ETF QMOM, ValueShares International Quantitative Value ETF IVAL and the ValueShares U.S. Quantitative Value ETF (BATS: QVAL). Those ETFs have over $66 million in combined assets under management.

IMOM, which charges 0.79 percent per year, holds 46 stocks. The new ETF “joins a small number of concentrated, active, and momentum-based ETFs currently in the marketplace. IMOM may invest in securities and depository receipts of companies in any industry and with any market capitalization. The Fund will invest in approximately 50 of the top international equity securities as determined by its Quantitative Momentum system,” said Alpha Architect in the statement.

None of IMOM's holdings exceed a weight of 2.7 percent and the fund is heavily allocated to developed markets as highlighted by the fact that Japanese stocks loom large in the new ETF. For investors that have been stung by emotions in the past, IMOM could be a compelling option because one of its objectives to limit the impact human biases can have on investing.

“IMOM may be best suited for investors and advisors that want a concentrated exposure to what the Advisor believes are the stocks with the highest quality momentum. The Fund’s Advisor adheres to a momentum investment philosophy and utilizes computer technology to minimize human biases, interpret past trends, and assess future prospects,” adds Alpha Architect.

Unlike most momentum ETFs, IMOM is concentrated and active, which means the fund could lag in the short-term. Conversely, patient investors could be handsomely rewarded over long-term holding periods.