As it chases the hottest Wall Street phenomena of embracing value stocks against tech, one $16 billion exchange-traded fund is getting a major revamp this week.

As per Wells Fargo WFC , the iShares MSCI USA Momentum Factor ETF (MTUM) MTUM of BlackRock BLK  will witness a whopping 68% of its assets shift, in order to retain the market's best performers over the last year. 

Stock Market

Stocks markets across the globe have been very volatile and unpredictable since the onset of the coronavirus pandemic making it necessary for investors and funds to question their conventional strategies.

During the month of April, inflation increased at a faster pace and the growth of new jobs was slow. Early jobs data for the month of May also indicates sluggish hiring. The jobs number expected for May is 488,000. Although this would be a good figure in normal circumstances, it is only half of what the authorities had targeted.

However, with the implementation of a successful vaccination campaign, the United States is on the right track to recovery. According to the Worldometers website, there have been 33,947,189 cases and 605,208 deaths as of May 26. According to the CDC, approximately 39.5% of the American population has been fully vaccinated, and 49.5% have received at least one dose. Considering this recovery, funds are also readjusting their portfolios to capitalize on changing market dynamics.

What Is MTUM?

MTUM belongs to a category of ETFs known as smart-beta funds with a $1.4 trillion market which chooses securities based on sound quantifiable research. The ETF rates stocks based on their six-month and one-year performance and rebalances every 6 months. As a result, it has held on to the poorly performing technology mega-caps far longer than its peers.

Big Tech Dump

With companies like Netflix NFLX  and Apple AAPL struggling this year, the ETF is on track to trail the larger U.S. economy for the third quarter in a row, which will be its worst streak since its introduction in 2013. Value stocks, on the other hand, have performed exceptionally well since November last year. The fund's adjustment, expected on Thursday, would increase the weightage of financial shares from nearly 2% to a third of its portfolio. Likewise, from a high of 40%, its exposure to Big Tech would drop to 17%. This would help the fund to regain its flair, assuming the approach remains effective. MTUM isn't the only one making a switch.

Direction Other Funds Are Taking

At the end of May, iShares' 5 major factor ETFs — momentum, valuation, quality, size, and minimum volatility — will all rebalance. It is widely anticipated, the sector-neutral value ETF may also observe some major shifts.

Conclusion

One of the most popular quant strategies of the decade is set to undergo a major overhaul, threatening to create new uncertainties in a financial market still reeling from the turbulence in Big Tech stocks. Only time will tell whether the decision made by BlackRock experts to decrease exposure to Big Tech is correct, at a time when Big Tech, more recently, is performing much better and pushing the Nasdaq NDAQ  up.