The S&P 500 Momentum Index significantly outperformed, rising 30% in the year to June 2025, double the S&P 500's gain, establishing it as the top-performing factor. This strong performance has fueled substantial growth in momentum ETFs, with the Invesco S&P 500 Momentum ETF (SPMO) more than doubling its AUM to $10.5 billion in 2025, driven by $5.4 billion in net inflows and 21% price appreciation. While the larger iShares MSCI USA Momentum Factor ETF (MTUM) also saw $2.2 billion in inflows and 17% gains, key differences in rebalancing, universe, and high-profile holdings like Amazon and Nvidia differentiate these leading momentum products.
The momentum factor has demonstrated significant outperformance, with the S&P 500 Momentum Index rising 30% in the year ended June 2025, a return double that of the broader S&P 500. This has established momentum as the top-performing factor, surpassing growth, free cash flow, and high beta strategies. This trend has fueled substantial capital inflows into associated ETFs, most notably the Invesco S&P 500 Momentum ETF (SPMO), which saw its assets more than double to $10.5 billion in 2025 on the back of $5.4 billion in net inflows and 21% price appreciation. While SPMO and the larger $17 billion iShares MSCI USA Momentum Factor ETF (MTUM) both capture this theme, they are constructed differently. SPMO rebalances semi-annually and has a significant concentration in Amazon and Nvidia, which together represent nearly 20% of its assets. In contrast, MTUM rebalances quarterly, sources from a broader mid- and large-cap universe, and notably does not hold either Amazon or Nvidia, leading to different sector exposures with a higher weight in Financials (23%) and Consumer Staples (12%) compared to SPMO.
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strongly positive
Sentiment Score
0.80
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