Alpha Architect is switching its ETFs over to active management. Effective Monday, the Alpha Architect International Quantitative Momentum ETF (IMOM), the Alpha Architect International Quantitative Value ETF (IVAL), the Alpha Architect U.S. Quantitative Momentum ETF (QMOM), the Alpha Architect U.S. Quantitative Value ETF (QVAL), and the Alpha Architect Value Momentum Trend ETF (VMOT) have changed from being passively managed (tracking their respective indexes) to being actively managed.
The core systematic investment processes for the funds have not changed.
- QVAL and IVAL will still seek to own the cheapest highest quality value stocks.
- QMOM and IMOM will still seek to own stocks with the highest quality momentum.
- VMOT will continue to be a multi-factor approach that incorporates long-only ETFs (QVAL, IVAL, QMOM, and IMOM) and a trend-following strategy into one ETF.
Alpha Architect CEO Wesley R. Gray said that the funds were originally actively managed, but Alpha Architect made the switch to index funds because they had custom baskets. But now, they’re switching the funds back to being actively managed because the firm believes that switching to active will enable greater flexibility in trading and execution. Gray also believes that actively managing the funds will reduce operational and compliance costs associated with running self-managed index ETFs.
“Functionally, we’ve done the same thing we’ve always done,” Gray said. “It was more cost-effective, so we switched.”
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