Q: Opinions of these etfs that have a technical bent to them and are rebalanced frequently based upon momentum/trends in the market. Both have done well. Would you recommend ? Thank you.
5i Research Answer:
Fees are high here (1.00% ADPV). We are comfortable with the strategy and the holdings of ADPV, but for a fund wanting to limit drawdowns it has very big positions (12%, 9%, 7%). But it owns momentum stocks, certainly, and we like momentum generally. However, it has not been around long enough to truly tell if it will meet its objectives in a down market. But one year is an impressive 53%. ZFN (0.90% fees) uses technical indicators. One year is 31.05%. 5-year is 11.82%. Again we are comfortable with the holdings here. It dropped 11% in 2018, which we would consider good (relative) performance. We would be fine owning either.