A number of exchange-traded funds that launched during the long-running, recently departed U.S. equity bull market were promoted as proverbial shelters from the storm when the sky eventually fell. Now that the sky has fallen with a mighty crash, how have those funds performed?

There are many products in this broad space of investment strategies ranging from low-volatility to hedged to long/short strategies, among others. The performance of these funds during the coronavirus-induced market meltdown has been all over the map, even within the same category.

For example, the JPMorgan Long/Short ETF (JPLS) was down 15.8% year to date through March 17, while the WisdomTree Dynamic Long/Short U.S. Equity Fund (DYLS) dropped 22.8% during that period.

That said, JPLS has done better on a relative basis versus the SPDR S&P 500 ETF (SPY), which plunged 21.5% year to date. 

Below is a list of several ETFs that were built for these times and have performed well during the selloff. Of course, these funds might fall out of favor when the market eventually heads north. But their performance in the current maelstrom illustrates the importance of having products that help protect portfolios when long-only equity strategies get smashed.

AGFiQ US Market Neutral Momentum Fund (MOM)
MOM is one of two funds being profiled here from AGF Management Ltd., a Toronto-based asset manager with a suite of factor-based ETFs that employ alternative, active risk-mitigation and income-focused strategies.

MOM, a ticker symbol that conjures a bit of comfort in these trying times, provides isolated exposure to the spread return between high- and low-momentum price stocks. Specifically, it tracks the Dow Jones U.S. Thematic Market Neutral Momentum Index that reconstitutes and rebalances monthly in equal dollar amounts in equally weighted long high-momentum (high returns) positions and equally weighted short low-momentum (low returns) positions within each sector.

The aim is to produce positive returns no matter the direction of the overall market, but that’s dependent upon high-momentum price stocks outperforming low-momentum price stocks.

It’s a strategy that has paid off big time this year, with a one-month return of 13.1% and a year-to-date return of 24.3%. It has average annualized three- and five-year returns of 8.3% and 3.1%, respectively.

MOM debuted in 2011 and has attracted just $4.3 million in assets. Its net expense ratio is a stiff 2.62%, which no doubt has scared off many investors. But its recent performance might give investors a reason to take a closer look at this fund.

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