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For years, a fierce debate has persisted in the ETF industry: can active investment managers and expert analysts outperform the market when compared to the efficiency of passive index investing. The solution to this long-standing debate may lie in synthesizing the strengths of these two formidable approaches.
Passive investing via indexes has become the preferred vehicle for many investors seeking efficient diversification, transparency, and disciplined, rules-based management. Concurrently, the active investment management industry continues to evolve, dedicating immense resources to granular analysis and bottom-up research. Asset managers, mutual funds, and hedge funds employ extensive teams of analysts to identify specific equities with alpha-generating potential in an effort to beat broader market benchmarks. This professional pursuit of an informational edge generates a vast repository of data, recommendations, and detailed valuations for publicly traded companies.
Methodological advancements in indexing now enable the evaluation of integrated models. These hybrid frameworks aim to capture the best of both worlds - active and passive - by identifying their optimal synergy. This represents an endeavor to marry the transparency, systematic nature, and cost-efficiency of indexing with the deep analytical capabilities and responsiveness to shifting trends characteristic of active research.
A prominent real-world application of this approach in the U.S. equity market is the collaboration between VettaFi and the global fintech firm TipRanks. This partnership has led to the development of a strict, rules-based index strategy designed to translate TipRanks’ proprietary analyst consensus data into a structured investment vehicle.
The TipRanks US Momentum Analysts Index (USANLTIP) offers an innovative approach that fuses professional analyst expertise with market momentum to establish a systematic and controlled framework for selecting high-quality equities. By utilizing a proprietary scoring model, the index identifies companies exhibiting strong price momentum backed by the collective recommendations of Wall Street analysts.
At the core of this model is TipRanks’ technological platform that monitors the historical performance of Wall Street analysts’ “Buy” recommendations over time to evaluate their individual track records. The index's methodology relies on a clearly defined, two-stage screening process applied to a universe of the 500 largest U.S. companies by market cap:
The entry threshold is determined by an "Analyst Consensus Score." This score is calculated as the ratio of "Buy" recommendations to the total number of recommendations issued for the security (including "Hold" and "Sell" ratings). The more decidedly the analyst consensus leans toward a "Buy," the higher the stock's score. To ensure data integrity, stringent baseline criteria are applied: a minimum coverage of at least 10 unique analysts covering the company, and fewer than 5% "Sell" recommendations. From the pool of equities meeting these threshold requirements, the 100 highest-scoring companies are selected.
The 100 companies selected in the first stage undergo further screening and are re-ranked based on their price momentum factor. Following this filter, only the 50 companies demonstrating the strongest upward price trends and market performance are retained from the highly recommended pool.
The final index composition represents the 50 U.S. equities that have received a dual validation - both from professional analyst consensus and from actual market forces (momentum). The index operates under predetermined risk management constraints: individual stock weights are capped at 6%, and sector exposure is limited to a maximum of 40% at each rebalancing date. The index undergoes a quarterly rebalancing, providing inherent dynamism and turnover aligned with shifting market realities.
Unlike traditional market-cap weighted indices, this index dynamically adjusts its stock and sector exposures towards the industries where analyst consensus converges with positive market price momentum.
A clear illustration of this occurred during the energy sector's bull cycle in 2022. Driven by commodity market shocks and inflationary pressures, Wall Street analysts became highly bullish on energy equities. Responding to these signals, the index expanded its energy sector exposure from under 2% at the end of 2021 to 17.8% by October 2022 - effectively concentrating capital in the S&P 500's top-performing sector that year. As oil prices stabilized and momentum waned, the index reduced this exposure to near-zero levels throughout 2023–2025, before new signals triggered an increase to approximately 6% in early 2026.
The two-stage model demonstrated robust performance in the market during the most recent calendar quarter (Q2 2026), which included the index’s June 2026 rebalancing:
Outperformance Rate: As of 6/30/2026, 76% of the constituent stocks (38 out of 50) outperformed the benchmark State Street SPDR S&P 500 ETF Trust (SPY), which posted a return of 14.83% in Q2 2026.
Long-Term Performance: Broadcom, which has maintained its position in the index for 14 consecutive quarters, generated significant alpha against the SPY ETF over its inclusion period, delivering a 488.85% return compared to the benchmark's 82.41% (an outperformance of over 400 percentage points).
Notable Quarterly Gainers: Among the companies recording exceptionally high returns Q2 2026 were Applied Materials, Micron Technology, and Revolution Medicines.
Below are some of the premier companies included in the index as of June 30, 2026, each characterized by strong analyst consensus paired with robust price momentum:
Amazon.com: The e-commerce and cloud computing giant, exhibiting a blend of bullish analyst sentiment and steady price performance.
Eli Lilly: A leading pharmaceutical company showing strong growth and market momentum driven by clinical and medical breakthroughs.
NVIDIA: A leader in semiconductors and artificial intelligence, backed by extensive analyst coverage and positive market momentum.
The TipRanks US Momentum Analysts Index delivers a model that blends the advantages of rules-based indexing with the added value of active financial research. By establishing a dual-filtration system - combining analyst sentiment with momentum factors - the index provides a structured solution for investors seeking exposure to leading U.S. companies while neutralizing psychological biases and the pitfalls of discretionary stock-picking. The methodology's built-in adaptability ensures that asset and sector allocations evolve dynamically alongside macroeconomic developments and real-time market data.
Click here for more information and to view the full methodology.
Disclaimer: This content is for informational purposes only and does not constitute investment advice, a recommendation, solicitation, or endorsement. VettaFi utilizes research tools and artificial intelligence processing. The company does not guarantee the accuracy or completeness of the information, and its use is at the sole risk of the user. This information should not be viewed as a substitute for official company filings or documents. The information above does not constitute an offer to purchase shares or units in mutual funds; any such purchase must be made solely based on a valid prospectus and current immediate reports. The provision of this information does not substitute for personalized investment advisory services tailored to an individual’s financial profile or needs.
For years, a fierce debate has persisted in the ETF industry: can active investment managers and expert analysts outperform the market when compared to the efficiency of passive index investing. The solution to this long-standing debate may lie in synthesizing the strengths of these two formidable approaches.
Passive investing via indexes has become the preferred vehicle for many investors seeking efficient diversification, transparency, and disciplined, rules-based management. Concurrently, the active investment management industry continues to evolve, dedicating immense resources to granular analysis and bottom-up research. Asset managers, mutual funds, and hedge funds employ extensive teams of analysts to identify specific equities with alpha-generating potential in an effort to beat broader market benchmarks. This professional pursuit of an informational edge generates a vast repository of data, recommendations, and detailed valuations for publicly traded companies.
Methodological advancements in indexing now enable the evaluation of integrated models. These hybrid frameworks aim to capture the best of both worlds - active and passive - by identifying their optimal synergy. This represents an endeavor to marry the transparency, systematic nature, and cost-efficiency of indexing with the deep analytical capabilities and responsiveness to shifting trends characteristic of active research.
A prominent real-world application of this approach in the U.S. equity market is the collaboration between VettaFi and the global fintech firm TipRanks. This partnership has led to the development of a strict, rules-based index strategy designed to translate TipRanks’ proprietary analyst consensus data into a structured investment vehicle.
The TipRanks US Momentum Analysts Index (USANLTIP) offers an innovative approach that fuses professional analyst expertise with market momentum to establish a systematic and controlled framework for selecting high-quality equities. By utilizing a proprietary scoring model, the index identifies companies exhibiting strong price momentum backed by the collective recommendations of Wall Street analysts.
At the core of this model is TipRanks’ technological platform that monitors the historical performance of Wall Street analysts’ “Buy” recommendations over time to evaluate their individual track records. The index's methodology relies on a clearly defined, two-stage screening process applied to a universe of the 500 largest U.S. companies by market cap:
The entry threshold is determined by an "Analyst Consensus Score." This score is calculated as the ratio of "Buy" recommendations to the total number of recommendations issued for the security (including "Hold" and "Sell" ratings). The more decidedly the analyst consensus leans toward a "Buy," the higher the stock's score. To ensure data integrity, stringent baseline criteria are applied: a minimum coverage of at least 10 unique analysts covering the company, and fewer than 5% "Sell" recommendations. From the pool of equities meeting these threshold requirements, the 100 highest-scoring companies are selected.
The 100 companies selected in the first stage undergo further screening and are re-ranked based on their price momentum factor. Following this filter, only the 50 companies demonstrating the strongest upward price trends and market performance are retained from the highly recommended pool.
The final index composition represents the 50 U.S. equities that have received a dual validation - both from professional analyst consensus and from actual market forces (momentum). The index operates under predetermined risk management constraints: individual stock weights are capped at 6%, and sector exposure is limited to a maximum of 40% at each rebalancing date. The index undergoes a quarterly rebalancing, providing inherent dynamism and turnover aligned with shifting market realities.
Unlike traditional market-cap weighted indices, this index dynamically adjusts its stock and sector exposures towards the industries where analyst consensus converges with positive market price momentum.
A clear illustration of this occurred during the energy sector's bull cycle in 2022. Driven by commodity market shocks and inflationary pressures, Wall Street analysts became highly bullish on energy equities. Responding to these signals, the index expanded its energy sector exposure from under 2% at the end of 2021 to 17.8% by October 2022 - effectively concentrating capital in the S&P 500's top-performing sector that year. As oil prices stabilized and momentum waned, the index reduced this exposure to near-zero levels throughout 2023–2025, before new signals triggered an increase to approximately 6% in early 2026.
The two-stage model demonstrated robust performance in the market during the most recent calendar quarter (Q2 2026), which included the index’s June 2026 rebalancing:
Outperformance Rate: As of 6/30/2026, 76% of the constituent stocks (38 out of 50) outperformed the benchmark State Street SPDR S&P 500 ETF Trust (SPY), which posted a return of 14.83% in Q2 2026.
Long-Term Performance: Broadcom, which has maintained its position in the index for 14 consecutive quarters, generated significant alpha against the SPY ETF over its inclusion period, delivering a 488.85% return compared to the benchmark's 82.41% (an outperformance of over 400 percentage points).
Notable Quarterly Gainers: Among the companies recording exceptionally high returns Q2 2026 were Applied Materials, Micron Technology, and Revolution Medicines.
Below are some of the premier companies included in the index as of June 30, 2026, each characterized by strong analyst consensus paired with robust price momentum:
Amazon.com: The e-commerce and cloud computing giant, exhibiting a blend of bullish analyst sentiment and steady price performance.
Eli Lilly: A leading pharmaceutical company showing strong growth and market momentum driven by clinical and medical breakthroughs.
NVIDIA: A leader in semiconductors and artificial intelligence, backed by extensive analyst coverage and positive market momentum.
The TipRanks US Momentum Analysts Index delivers a model that blends the advantages of rules-based indexing with the added value of active financial research. By establishing a dual-filtration system - combining analyst sentiment with momentum factors - the index provides a structured solution for investors seeking exposure to leading U.S. companies while neutralizing psychological biases and the pitfalls of discretionary stock-picking. The methodology's built-in adaptability ensures that asset and sector allocations evolve dynamically alongside macroeconomic developments and real-time market data.
Click here for more information and to view the full methodology.
Disclaimer: This content is for informational purposes only and does not constitute investment advice, a recommendation, solicitation, or endorsement. VettaFi utilizes research tools and artificial intelligence processing. The company does not guarantee the accuracy or completeness of the information, and its use is at the sole risk of the user. This information should not be viewed as a substitute for official company filings or documents. The information above does not constitute an offer to purchase shares or units in mutual funds; any such purchase must be made solely based on a valid prospectus and current immediate reports. The provision of this information does not substitute for personalized investment advisory services tailored to an individual’s financial profile or needs.
