Considering today’s towering market, FV’s investing style should gift investors with interesting returns. Also, the fund will prove to be a good choice for investors who want well-diversified exposure across sectors.
This is not the first time that investors get to purchase an ETF made of ETFs. Many ETFs in the diversified portfolio space are structured in this form. However, FV operates in the large cap blend equities ETF space which is ruled by the largest and most actively traded U.S. ETF SPDR S&P 500 ETF (SPY) having an asset base of about $159 billion.
Also, FV should face competition from momentum ETFs as the former is especially meant for momentum plays. The momentum ETF space is ruled by iShares MSCI USA Momentum Factor ETF (MTUM) rising about 5.11% this year against 1.93% in SPY. Making its debut in April 2013, MTUM has so far amassed about $231 million in assets (read: iShares Launches 5 US-Focused ETFs).
We still believe that FV’s approach is unique in both the large cap blend and momentum equities ETF space — which are truly crowded areas – and should not face any difficulty in building up a sizable asset base. To add to this, all its underlying ETFs fall under the Zacks top-ranked category indicating FV should be the center of attention within a short span of time.
This article is brought to you courtesy of Eric Dutram.