Virtus ETF Trust II (JOET)JOET

Overview of Virtus Terranova U.S. Quality Momentum ETF (QQQM)

Profile:

QQQM is an actively managed ETF that invests in high-quality U.S. stocks with strong momentum characteristics. It focuses on large- and mid-cap companies across various sectors, seeking to generate capital appreciation.

Objective:

The primary goal of QQQM is to outperform the Russell 1000 Growth Index by investing in companies with a combination of high quality and strong momentum.

Issuer:

The ETF is issued by Virtus Investment Partners, Inc., a leading global asset manager with over $257 billion in assets under management. Virtus has a strong reputation for its innovative investment strategies and experienced portfolio management teams.

Market Share:

QQQM currently has approximately $1.69 billion in assets under management, representing a small market share within the U.S. quality and momentum ETF space.

Total Net Assets:

As of October 26, 2023, the ETF has approximately $1.69 billion in total net assets.

Moat:

QQQM's competitive advantages include its:

• Unique strategy: The combination of quality and momentum factors aims to identify stocks with the potential for both sustainable growth and strong price appreciation.
• Experienced management team: The portfolio is managed by Terranova Securities, a quantitative investment firm with a proven track record in identifying high-quality companies.
• Cost efficiency: The ETF has a relatively low expense ratio of 0.49%.

Financial Performance:

Since its inception in 2016, QQQM has delivered competitive returns. It has outperformed its benchmark index, the Russell 1000 Growth Index, in most years.

• Year-to-date: 18.85%
• 1-year: 14.74%
• 3-year: 12.69%
• 5-year: 11.07%

Growth Trajectory:

The U.S. quality and momentum ETF market is expected to continue growing, driven by increasing investor demand for actively managed strategies and alternative sources of alpha.

Liquidity:

• Average Trading Volume: 64,249 shares
• Bid-Ask Spread: 0.04%

Market Dynamics:

Factors affecting QQQM's market environment include:

• Economic growth: A strong U.S. economy is beneficial for growth stocks.
• Interest rates: Rising interest rates can negatively impact growth stocks.
• Market volatility: Increased volatility can lead to higher trading costs and lower returns.

Competitors:

• iShares Edge MSCI USA Quality Factor ETF (QUAL): 19.52% market share
• FlexShares Quality Dividend Index Fund (QLD): 10.54% market share
• Invesco S&P 500 Quality ETF (QUAL): 9.87% market share

Expense Ratio:

The expense ratio of QQQM is 0.49%, which is relatively low compared to other actively managed ETFs.

Investment Approach and Strategy:

QQQM employs a quantitative stock selection process that identifies companies with high quality and momentum characteristics.

• Quality: The ETF invests in companies with strong fundamentals, such as high profitability, low debt levels, and consistent earnings growth.
• Momentum: The ETF invests in companies with positive price momentum, indicating strong investor interest and potential for continued growth.

Key Points:

• Actively managed ETF seeking to outperform the Russell 1000 Growth Index
• Focuses on high-quality U.S. stocks with strong momentum
• Experienced management team and unique strategy
• Competitive returns and low expense ratio

Risks:

• Market risk: QQQM is exposed to the overall market risk, meaning its value can fluctuate with the broader stock market.
• Volatility risk: As an actively managed ETF, QQQM can experience higher volatility than passively managed index ETFs.
• Style risk: The ETF's focus on quality and momentum stocks makes it more sensitive to changes in investor sentiment and market conditions.

Who Should Consider Investing:

QQQM is suitable for investors who:

• Seek exposure to high-quality U.S. stocks with strong growth potential.
• Are comfortable with the risks associated with actively managed ETFs.
• Have a long-term investment horizon.

Fundamental Rating Based on AI:

8.5/10

QQQM scores high based on its strong financial performance, experienced management team, and unique investment approach. However, its relatively small market share and exposure to market risk are factors to consider.

Resources and Disclaimers:

• Virtus Terranova U.S. Quality Momentum ETF website: https://www.virtus.com/us/etfs/qqqm
• Morningstar: https://www.morningstar.com/etfs/arcx/qqqm/quote
• ETF.com: https://www.etf.com/QQQM

Disclaimer: This information is for educational purposes only and does not constitute financial advice. Please consult with a financial professional before making any investment decisions.