AUSF ETF

The Global X Adaptive U.S. Factor ETF (AUSF) adjusts its investments between minimum volatility, value, and momentum factors to respond to market changes. By modifying its factor exposure according to recent performance, AUSF seeks to achieve better returns with a mix of 50/50 or 40/40/20. The fund mainly invests in the Financial sector and includes a variety of companies such as IBM, AT&T, and Verizon, which help provide stability and value.

AUSF tracks an index that is designed to rotate in and out of three factors, namely value, momentum, and low volatility. In the current version, AUSF has a high earnings yield, with most holdings demonstrating soft growth characteristics and low beta. There is an adequate dosage of quality. Due to spotty past performance and the factor mix that I believe looks weak for the current environment, AUSF does not deserve a rating upgrade today.

Passively managed AUSF has a multi-factor equity strategy revolving around value, momentum, and low volatility that has not translated into consistent outperformance in the past. The ETF currently has a tilt toward less expensive, less volatile stocks with unappealing growth characteristics. The paradox is that AUSF emerged from the 2022 bear market almost unscathed, but still delivered the worst maximum drawdown in the ETF group discussed in the article.