"You don't have to go for the Nasdaq-100 to beat the S&P 500 year after year, because an ETF based on the SPY called the Invesco S&P 500 Momentum ETF (NYSEARCA:SPMO ) has managed to beat the S&P 500 for the past three years. It has done so while giving you equal to, and in some cases lower downside, versus the S&P 500."
"You're investing in the 100 S&P 500 constituents that score highest on a volatility-adjusted momentum metric. In plain terms, you're betting on the winners. Trends in the market show that the winners keep winning. However, these winners do change over time. For example, the Magnificent 7 were big-time winners in 2023 and through much of 2024. Wall Street's focus then changed, and software stocks started winning."
Invesco S&P 500 Momentum ETF (SPMO) selects the 100 S&P 500 constituents with the highest volatility-adjusted momentum scores, favoring recent winners. The fund reconstitutes and rebalances semi-annually on the third Fridays of March and September, balancing turnover and adaptability. SPMO has outperformed the S&P 500 for the past three years while delivering similar or lower downside in some periods. Sector leadership rotates—from the Magnificent Seven to software, now toward data-center hardware and defensive names—so momentum selection captures shifting winners without the extreme concentration or turnover of thematic ETFs.
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