JOET: Remains Unappealing On Factor, Performance Fronts, A Hold At Best

Why It Matters

JOET’s persistent underperformance signals that its quality‑momentum blend may not deliver the risk‑adjusted returns investors expect, prompting a reassessment of its role in diversified portfolios.

Key Takeaways

• JOET has underperformed S&P 500 by roughly 2× since November 2025
• 36‑month active return vs IVV sits at –4.72%, among worst peers
• April reconstitution added Apple, Amazon, Caterpillar; median return 2.5% vs IVV 4.29%
• Quality metrics strong (83.5% A‑Quant profitability) but growth and GARP exposure weak
• Analyst keeps Hold, citing poor track record and geopolitical commodity risks

Pulse Analysis

JOET’s recent track record underscores a broader challenge for factor‑based ETFs that blend quality and momentum. While the fund’s methodology—selecting the top 250 momentum‑ranked large‑cap stocks and filtering them through rigorous quality screens—sounds compelling, the execution has fallen short. Since its inception in 2020, JOET has consistently lagged the S&P 500 and even other quality‑focused funds, delivering a rolling 36‑month active return of –4.72% against IVV. This underperformance is amplified by a weak upside capture, especially during periods when the broader market rallies, suggesting that the ETF’s factor tilt may not translate into real‑world alpha.

The April 2024 reconstitution introduced high‑profile names such as Apple, Amazon, and Caterpillar, yet the median return of the new additions was a modest 2.5% compared with IVV’s 4.29% over the same window. The disparity highlights a critical issue: even with marquee stocks, the equal‑weight structure dilutes the impact of top performers while exposing investors to underperformers like Devon Energy, which fell nearly 14%. Moreover, JOET’s growth and GARP (growth at a reasonable price) metrics remain thin, limiting its appeal in an environment where investors increasingly seek balanced exposure to both quality and growth.

For portfolio managers, JOET’s story serves as a cautionary tale about overreliance on factor labels without scrutinizing the underlying composition and market dynamics. The ETF’s robust quality scores—83.5% of holdings earn an A‑Quant profitability rating—are offset by its limited growth exposure and subpar risk‑adjusted returns. Given the ongoing geopolitical uncertainties affecting commodity markets and inflation, investors may favor pure quality or GARP strategies over JOET’s hybrid approach. Until the fund demonstrates a clear path to narrowing the performance gap, a Hold stance remains prudent.