SPMO

SPMO: Large Cap Momentum At Its Best
January 19, 2023

Summary

• Momentum is the simple idea that stocks which performed relatively strong over the recent past (winners) tend to outperform those that performed poorly (losers).
• The Invesco S&P 500 Momentum ETF invests in the 100 stocks with the highest “momentum score” (12-month return) from the S&P 500 Index.
• Since inception in 2015, SPMO delivered momentum exposure with respect to the academic benchmark of Kenneth French. Since 2017, it also outperformed most momentum-peers.
• SPMO especially outperformed MTUM, a similar large cap momentum ETF. However, most of this outperformance is unlikely systematic and probably comes from different rebalancing dates in 2022.
• For investors who actively want large-cap momentum exposure, SPMO is a reasonable and cheap instrument. For those who want general momentum exposure, a fund with a larger universe is probably the better choice.