In the one-year period ended June 2025, the S&P 500 Momentum Index rose 30%, essentially double the gain of the S&P 500. Momentum was the best-performing factor of the widely tracked benchmark, ahead of growth, free cash flow, and even high beta slices. The trend was investors’ friend, and this has persisted into the third quarter.
The Invesco S&P 500 Momentum ETF (SPMO) tracks the S&P 500 factor index. The $10.5 billion fund has more than doubled in size in 2025. This is due to its $5.4 billion of net inflows and its 21% price appreciation as of July 22. SPMO owns shares of 100 large-cap companies, with the strongest relative strength based on 12-month performance. The ETF is constituted semiannually, with the next changes to occur in late September.
Momentum vs. Growth: What’s the Difference?
Momentum investing is different from growth investing, although there is some overlap. The SPDR S&P 500 Growth ETF (SPYG) owns 212 stocks that exhibit strong sales growth and earnings change relative to price, as well as momentum. It was up 12% as of July 22 and its holdings are updated annually in December.
Though SPMO and SPYG have the same starting universe — the S&P 500 — their portfolios look different. SPYG had 41% of assets invested in information technology stocks, nearly double that of SPMO (23%). Meanwhile, SPMO had 9% in consumer staples, which was triple the exposure found in SPYG. Financials was the second-largest sector for SPMO, at 20%, compared to being the fourth-largest for SPYG (12%).
With its strong recent demand, SPMO is the second-largest momentum ETF, according to our research. The iShares MSCI USA Momentum Factor ETF (MTUM) manages $17 billion. The fund has added $2.2 billion of net inflows and was up 17% for the year.
MTUM Build Differently Than SPMO
MTUM is distinct from SPMO in a few ways. It rebalances quarterly, with the next one scheduled in late August. Constituents qualify based on six- and 12-month relative strength. In addition, the iShares ETF’s universe includes mid- and large-cap companies. Financials (23% of assets) is the largest of MTUM’s sectors, followed by information technology (18%). The iShares ETF also has higher exposure to consumer staples, at 12% of the portfolio.
Interestingly, Amazon.com and Nvidia are SPMO’s two largest positions, representing nearly 20% of assets. However, neither stock is found in MTUM. Meanwhile, Phillip Morris International has a larger position in MTUM.
All in the Momentum Family
Both Invesco and iShares offer a suite of momentum ETFs tied to other investment styles for advisors and their clients looking to incorporate the factor throughout a portfolio. Examples include the Invesco S&P MidCap Momentum ETF (XMMO) and the iShares MSCI Intl Momentum Factor ETF (IMTM). If you believe the markets will continue climb higher, momentum investing is a great risk-on way to invest.
Originally published at Advisor Perspectives
For more news, information, and strategy, visit the Innovative ETFs Content Hub.
