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Youth Isn't Holding Back These Multifactor ETFs

Multifactor exchange traded funds are a fast-growing corner of the broader ETF industry, and many lack the five- and 10-year track records many investors and fund analysts deem important.

In recent years, some advisors and investors have not waited for new ETFs to gain appropriate “seasoning” before jumping in.

Of the more than 1,300 ETFs in CFRA Research's coverage universe, 31 percent have come to market in the past three years, Todd Rosenbluth, the firm's director of ETF and mutual fund research, said in a Monday note. That figure includes some multifactor ETFs.

“Based on fund flows, investors are not waiting for an ETF to hit an anniversary before investing, as many of these young products have passed the $100-million milestone,” Rosenbluth said. 

A Popular Multifactor ETF

The JPMorgan Diversified Return U.S. Equity ETF JPUS does not turn 3 until September, but the product has quickly proven successful — as highlighted by $491.1 million in assets under management as of March 9. Source

The price has reached the upper edge of the rising wedge. Stochastics are overbought, so we can expect some downside. 

$JPUS, JPMorgan Diversified Return U.S. Equity ETF / D