Independent investment manager Aptus Capital Advisors has become the latest US firm to launch an exchange-traded fund. The Aptus Behavioral Momentum ETF (BEMO), which tracks the proprietary Aptus Behavioral Momentum Index, was unveiled on the Bats ETF Marketplace on 9 June 2016.
The Aptus Behavioral Momentum ETF holds an equal-weighted position in 25 US equities displaying significant price momentum during upwards trending markets.
The fund adapts its strategy according to current market conditions. In favourable market environments, the Aptus Behavioral Momentum ETF seeks to own stocks that are making, or near, new highs, while in difficult environments seeks to preserve capital by gaining exposure to treasury securities.
When the index rebalances, if the drawdown on the parent Solactive US Large Cap Index is greater than 10% over the previous 120 trading days, the Aptus Behavioral Momentum Index switches to a 100% long position in the iShares 7-10 Year Treasury Bond ETF. This position is reversed when the Solactive US Large Cap Index rises above its 100-day simple moving average.
During periods of positive stock market momentum, the Aptus Behavioral Momentum Index tracks the equal-weighted performance of the top 25 stocks in the Solactive US Large Cap Index ranked by their 120-day return and the proximity of their most recent closing level to their 52-week highs.
The fund has a total expense ratio of 0.79%.
The fund will compete with a number of available US equity ETFs that isolate the momentum factor. These include the:
PowerShares DWA Momentum Portfolio (NYSE Arca: PDP). TER – 0.63%
PowerShares DWA NASDAQ Momentum Portfolio (NYSE Arca: DWAQ). TER – 0.60%
iShares Edge MSCI USA Momentum Factor ETF (NYSE Arca: MTUM). TER – 0.15%
SPDR S&P 1500 Momentum Tilt ETF (NYSE Arca: MMTM). TER – 0.12%
Laura Morrison, Senior Vice President, Global Head of Exchange-Traded Products, at Bats, commented: “We are thrilled that Aptus Capital Advisors has selected the Bats ETF Marketplace as the home for their first ETF. We appreciate the unique Aptus methodology and look forward to working with them as they continue their growth and impact markets.”
Aptus became the eleventh ETF issuer to list funds on the Bats ETF Marketplace.