As the bull market extends, exchange traded fund investors can still find opportunities, but they will have to closely monitor the markets for developing trends and act accordingly.
“We think that there could be the potential for a pause in the second half of the year. So our portfolio, we are getting a little bit more defensive, yet we are not calling for recession. We think there are plenty of opportunities across the marketplace,” Lance Humphrey, AVP, Portfolio Manager, USAA Asset Management Company, said at the Morningstar Investment Conference.
As a way to help investors better access developing opportunities in the market, USAA Asset Management Company focuses on value and momentum factor-based ETF investments. Through their hands-on experience with investing in ETFs, USAA offers its own ETF suite, including USAA MSCI USA Value Momentum Blend Index ETF (ULVM), USAA MSCI USA Small Cap Value Momentum Blend Index ETF (USVM), USAA MSCI International Value Momentum Blend Index ETF (UIVM) and USAA MSCI Emerging Markets Value Momentum Blend Index ETF (UEVM).
The suite of smart beta ETFs is built as core portfolio-building components and allows investors more choices at a competitive cost.
The factor-based lineup screens for the value and momentum factors, identifying stocks with attractive valuations and positive price momentum and weighting the two factors in such a way to help investors diversify against the risk of individual holdings. Academic research suggests that focusing on stock companies with factors like attractive valuations and improving momentum have led to higher excess returns.
Watch the full interview between ETF Trends CEO Tom Lydon and Lance Humphrey:
For more ETF-related commentary from Tom Lydon and other industry experts, visit our video category on ETF Trends.