Analyzing Invesco's S&P 500 Momentum ETF: A Closer Look at Its Performance and Strategy

Invesco's S&P 500 Momentum ETF (SPMO) targets large-cap stocks that have performed well in the last year. The ETF has consistently delivered strong returns, but its momentum-based approach can lead to high volatility. SPMO tracks the S&P 500 Momentum Index, which selects stocks based on their 12-month price performance. The ETF has an expense ratio of 0.39% and is suitable for investors seeking consistent exposure to high-performing stocks.

Invesco's S&P 500 Momentum ETF (SPMO) is designed to provide investors with exposure to large-cap stocks that have demonstrated strong performance in the past year. The ETF tracks the S&P 500 Momentum Index, which selects stocks based on their 12-month price performance. This momentum-based approach can lead to high volatility but has consistently delivered strong returns [1].

SPMO's expense ratio is 0.39%, which is relatively low compared to many other ETFs. This makes it an attractive option for investors seeking consistent exposure to high-performing stocks without incurring excessive fees. The fund is non-diversified and focuses on approximately 100 stocks from the S&P 500 Index that have the highest momentum scores [1].

The ETF's top holdings include NVIDIA Corp (NVDA), Apple Inc (AAPL), and Microsoft Corporation (MSFT), which are all major players in the technology sector. This sector weighting of 51.54% reflects the fund's focus on growth-oriented companies [1].

SPMO has shown impressive performance, with a 1-year return of 61.20% and a YTD return of 33.71% as of July 2, 2025. However, it is important to note that the momentum strategy can lead to significant volatility, as the fund's performance is heavily influenced by the recent price performance of its underlying stocks [1].

Investors should be aware of the risks associated with momentum investing. While the strategy can generate high returns during bull markets, it can also lead to substantial losses during bear markets. Additionally, the fund's non-diversification can increase its risk profile, as it is more exposed to the performance of a smaller group of stocks [1].

In conclusion, Invesco's S&P 500 Momentum ETF (SPMO) is a momentum-driven strategy that offers investors exposure to large-cap stocks with strong recent performance. With a low expense ratio and impressive historical returns, it is an attractive option for investors seeking high growth potential. However, the fund's volatility and non-diversification should be carefully considered before making an investment decision.

References:
[1] https://money.usnews.com/funds/etfs/large-growth/invesco-s-p-500-momentum-etf/spmo
[2] https://www.ainvest.com/news/alphabet-surges-2-59-volatile-intraday-action-fueling-momentum-2508/
[3] https://www.theglobeandmail.com/investing/markets/markets-news/Motley%20Fool/34220548/3-vanguard-etfs-to-buy-with-2-000-and-hold-forever/