Global Beta launched two factor-based ETFs recently – one in the space of low-beta investing another in the space of high growth or momentum investing. Investors should note that the first half of 2020 was all about the outbreak of coronavirus in late January and its rapid spread to various parts of the world by the end of the first quarter. No wonder, Wall Street snapped its longest bull run ever in March and went on to record its worst quarter since fourth-quarter 2008.
However, unprecedented stimulus measures by global central banks and governments pulled the ailing global markets out very soon from nadir. As a result, global stocks rallied in early Q2. However, a second wave of coronavirus hit the market thanks to the gradual reopening. The net result is a growing number of U.S. states reissuing social distancing standards in the past few weeks to arrest the increase in coronavirus cases.
For the markets, it has become a tug-of-war between global policy easing and a spike in virus cases. The former is aiding the market rally while the latter is driving markets down, making the stock market pretty volatile.
In order to ride out such an environment, Global Beta has brought about the below-mentioned products. While the momentum one is apt for playing an upbeat market, a low-beta one should be played when the market mood is somber.
Global Beta Momentum-Growth ETF (GBGR)
The Global Beta Momentum-Growth ETF looks to track the performance (before fees and expenses) of the Global Beta Momentum-Growth Factor Index. The index is composed of stocks in the S&P 500 index with highest sales growth.
The fund is designed to provide exposure in domestic large-cap names with the fastest-growing securities. Energy (34.3%), Communication Services (20.5%), Consumer Discretionary (16%) are the three top sectors of the fund. The net expense ratio of the fund is 29 bps.
No stock accounts for more than 5.50% of the fund. Amazon (NASDAQ:AMZN) (5.50%), Wal-Mart (NYSE:WMT) (5.20%), Costco (NASDAQ:COST) (5.16%), Kroger (NYSE:KR) (5.08%) and Verizon (NYSE:VZ) (4.7%) hold the top three positions in the fund. The fund is heavy on Amazon (11.10%) and Microsoft (NASDAQ:MSFT) (10.03%).
Global Beta Low Beta ETF (GBLO)
The Global Beta Low Beta ETF (GBLO) looks to track the performance (before fees and expenses) of the Global Beta Low Beta Factor Index. The index is composed of stocks in the S&P 500 index with the lowest relative beta to the S&P 500.
The fund is designed to provide exposure to domestic large-cap names with the lowest systematic risk to the broad market. Consumer Staples (35.2%), Communication Services (27.3%) and Consumer Discretionary (12.9%) are the top three sectors of the fund. The net expense ratio of the fund is 29 bps.
No stock accounts for more than 5.50% of the fund. Amazon (5.50%), Wal-Mart (5.20%), Costco (5.16%), Kroger (5.08%) and Verizon (4.7%) hold the top three positions in the fund.
Any Competition?
The space is packed with competitive products. GBGR would face competition from iShares Edge MSCI USA Momentum Factor ETF MTUM, Invesco DWA Momentum ETF (PDP) and SPDR Russell 1000 Momentum (NYSE:ONEO) Focus ETF ONEO. Among these, MTUM (15 bps in fees) and ONEO (20 bps) charge less than the newbie.
GBLO ETF does not face much competition directly. However, there are a lot of low-volatility ETFs available in the market, namely iShares Edge MSCI Min Vol USA ETF USMV and Invesco S&P 500 Low Volatility ETF SPLV.
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iShares Edge MSCI Min Vol USA ETF (USMV): ETF Research Reports
Invesco DWA Momentum ETF (PDP): ETF Research Reports
Invesco SP 500 Low Volatility ETF (SPLV): ETF Research Reports
SPDR Russell 1000 (NYSE:SPLG) Momentum Focus ETF (ONEO): ETF Research Reports
iShares Edge MSCI USA Momentum Factor ETF (MTUM): ETF Research Reports
GLBLB MOMGR (GBGR): ETF Research Reports
GLBLB LOW BETA (GBLO): ETF Research Reports
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