Momentum-focused ETFs slid Thursday as Wall Street’s high-flying AI and software trades abruptly reversed, triggering one of the sharpest factor unwinds seen this year and rattling investors who had piled into market leaders.
• iShares MSCI USA Momentum Factor ETF stock is at critical resistance. What’s driving MTUM to record levels?
The sell-off hit momentum strategies especially hard because many had become heavily concentrated in AI-linked and high-beta growth stocks after months of strong gains.
The iShares MSCI USA Momentum Factor ETF (BATS:MTUM) fell 1.8% on Thursday, its worst daily decline since late March. Other momentum-focused funds also weakened, including the Invesco Dorsey Wright Momentum ETF (NASDAQ:PDP) and Alpha Architect U.S. Quantitative Momentum ETF (NASDAQ:QMOM), as traders rotated away from richly valued growth names.
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