Core Insights - The Virtus Terranova U.S. Quality Momentum ETF (JOET) integrates quality and momentum investing strategies with an equal-weighted approach, aiming to capitalize on quality momentum stocks, which is expected to perform well in favorable market conditions [1] Group 1 - The ETF combines two extreme factors in investing: quality and momentum [1] - The strategy is designed to perform well when markets are favorable for quality momentum stocks [1]

Core Viewpoint - Virtus Terranova U.S. Quality Momentum ETF (JOET) offers targeted exposure to U.S. large-cap equities that combine strong balance-sheet quality with sustained price momentum [1] Investment Strategy - The strategy systematically screens a broad universe for profitability, earnings stability, and balance-sheet strength alongside trend persistence [1] - JOET assembles an equal-weighted, sector-aware portfolio aimed at diversifying single-name and industry risk [1] - The approach emphasizes disciplined reconstitution to refresh signals and mitigate factor decay and crowding [1] Performance Characteristics - JOET's risk/return profile typically reflects factor cyclicality, benefiting during stable or improving economic conditions when quality balance sheets and leadership trends are rewarded [1] - The ETF may lag during abrupt factor rotations or sharp reversals into deep value [1] Practical Applications - JOET can serve as a satellite sleeve to express a quality-momentum tilt, factor completion within a multi-factor core, or as a systematic growth complement to dividend or value allocations [1] Key Risks - A key risk to monitor is turnover and associated trading costs, which can modestly drag performance when signals churn [1]

Core Viewpoint - The Virtus Terranova U.S. Quality Momentum ETF (JOET) has successfully utilized a quantitative approach to identify high-potential stocks, outperforming the Invesco S&P 500 Equal Weight ETF (RSP) this year [1][2]. Investment Strategy - The ETF's holdings are selected based on a strict rules-based methodology, screening the 500 largest U.S. companies for those with the highest positive momentum over the past 12 months, resulting in a selection of the top 250 stocks [2]. - These selected stocks are then evaluated on three quality factors: return on equity, debt-to-equity ratio, and annualized sales growth rate over the past three years, leading to a final selection of the top 125 stocks for the ETF [3]. Fund Management - Although JOET is not actively managed in a traditional sense, it undergoes quarterly rebalancing, allowing the strategy to capture alpha without emotional biases [4]. - The fund has demonstrated the ability to identify and capitalize on market trends, such as the early investment in Palantir, which has seen significant price appreciation [5][6]. Future Plans - The company plans to expand its suite of ETF products to include other asset classes, such as small-cap and European equities, while maintaining its successful investment strategy [7]. - The JOET fund has an expense ratio of 0.29% and manages approximately $240 million in assets [8].