Alex Vynokur
Betashares, a leading Australian financial services company, has launched the Betashares Australian Momentum ETF (ASX: MTUM) – the first Australian equities momentum ETF on the ASX. The latest innovation from Betashares provides a solution for investors to conveniently access exposure to a systematic, rules-based momentum investing strategy.
As a strategy, momentum investing involves buying stocks which have outperformed and avoiding or selling those that have underperformed in the recent past – an attractive approach that many individual investors find difficult to implement themselves given time requirements, its susceptibility to behavioural bias, and execution costs.
For investors and advisers, the strategy offers a unique return profile that can be used in combination with existing core portfolio building blocks.
MTUM follows a rules-based index to prioritise stocks with strong and consistent momentum, while cutting the worst performers quickly.
“As a strategy, momentum investing is appealing to a broad range of investors given its performance potential, but it is often difficult to implement due to a range of factors like the time required to manage such a strategy, the identification of outperforming stocks, behavioural bias and execution costs. It’s our view that a systematic, rules-based index approach to momentum investing can assist investors to efficiently access the unique return profile of this style factor,” Betashares CEO, Mr Alex Vynokur said.
Momentum investing is backed by academic research and has generally worked well across different markets – both Australian and international – over the long term. MTUM’s index has outperformed the S&P/ASX 200 Index by 2.8% p.a. from its inception in May 2011 to end June 2024.*
“The Betashares Australian Momentum ETF combines the performance potential of momentum investing with the convenience of an ETF. To that end, MTUM is a complementary addition to our growing range of innovative investment solutions that assist investors and their financial advisers to implement institutional grade strategies within their portfolios,” Mr Vynokur concluded.
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