What is a momentum ETF and how does it differ from a standard index fund?

A momentum ETF seeks to capitalise on stocks that have recently performed well, based on the idea that such trends may continue. Unlike broad market index funds that weight holdings by market capitalisation, momentum funds systematically buy winners and sell losers. Both MTUM and SPMO follow this logic but use different underlying indexes, resulting in distinct portfolio compositions and risk profiles for investors.

What are expense ratios and how do they affect ETF returns?

An expense ratio is the annual fee charged by an ETF to cover management and operational costs, deducted from the fund's assets. A lower ratio generally means higher net returns for investors over time. For instance, SPMO charges 0.13%, while MTUM charges 0.15%. While a 0.02 percentage-point difference seems small, it compounds over long periods, subtly impacting overall portfolio growth.

How do fund size and liquidity influence the trading of momentum ETFs?

Net assets and trading volume affect how easily an ETF can be bought or sold without impacting its price. Larger funds often provide better liquidity and tighter bid-ask spreads. SPMO holds $28.9 billion in net assets, compared to $24.8 billion for MTUM. Both funds possess substantial scale, which typically mitigates tracking errors and reduces operational risks for traders and investors.

How do MTUM and SPMO differ in their index tracking methodologies?

MTUM tracks the MSCI USA Momentum Index, which includes a broader universe of US equities. SPMO tracks the S&P 500 Momentum Index, focusing strictly on stocks within the S&P 500. This distinction means MTUM may include mid-cap and smaller large-cap companies, while SPMO remains concentrated in the largest US firms. The differing universe definitions lead to unique sector and stock exposures.

What does the overlap in top holdings tell us about these two funds?

Both funds share six stocks in their top-ten holdings: AMD, MU, INTC, JNJ, GOOGL and XOM. This overlap indicates that the momentum leaders in the broader US market often align with those in the S&P 500. However, the weightings differ significantly; for example, MU accounts for 11.09% of SPMO but only 5.29% of MTUM, highlighting varying concentration risks.

Which fund offers higher yield and does this make it better for income?

MTUM provides a 0.59% dividend yield, while SPMO offers 0.72%. Neither fund is designed primarily for income generation; they are growth-oriented vehicles. Investors seeking income should look beyond yield to dividend growth and sustainability. The modest yields in these momentum funds reflect the nature of the holdings, which may prioritise capital appreciation and reinvestment over large cash distributions.

What are the concentration risks associated with the top holdings of these ETFs?

Concentration risk increases when a single holding comprises a large percentage of a fund. SPMO has a top holding weight of 11.09% for MU, and MTUM has 5.86% for AMD. Such weights mean the funds' performance is heavily influenced by these specific companies. While this can enhance returns if the stocks perform well, it also increases volatility and potential drawdowns.

How does market turnover affect momentum strategies like MTUM and SPMO?

Momentum strategies inherently involve higher portfolio turnover because they must frequently rotate into recently outperforming stocks and out of underperformers. This active rebalancing can lead to increased transaction costs and potential tax implications in taxable accounts. Both MTUM and SPMO face this dynamic, though the impact varies based on market conditions and the specific rebalancing schedules of their underlying indexes.

Why is the lack of sector weight data a consideration for potential investors?

Sector weights help investors understand if a fund is overly concentrated in specific industries, such as technology or healthcare. For both MTUM and SPMO, current sector weight data is listed as not available in the provided information. Without this transparency, investors must examine top holdings or rely on alternative sources to gauge potential sector concentration risks within their broader portfolio allocations.

Do inception dates and history matter when comparing these two momentum ETFs?

MTUM was launched on 16 April 2013, giving it a longer operational history than SPMO, which was established on 9 October 2015. A longer history provides more data on how the strategy has performed across various market cycles, including different interest rate environments and economic conditions. This track record can be useful for assessing strategy resilience, though past performance never guarantees future results.

What should beginners know about the tax efficiency of holding ETFs versus mutual funds?

ETFs generally offer better tax efficiency than mutual funds because of their unique creation and redemption process, which allows managers to offset gains. This structural advantage benefits both MTUM and SPMO. However, momentum strategies still generate realised gains due to turnover. Investors should be aware that capital gains distributions can occur, and the actual tax impact depends on the investor's jurisdiction and account type.

Can I own both MTUM and SPMO in the same portfolio?

Holding both MTUM and SPMO may provide broader exposure than owning just one, as MTUM covers a wider universe of US equities. However, significant overlap exists in their top holdings. This redundancy might not provide diversification benefits proportional to the additional complexity. Investors often choose based on whether they prefer the broader US market access of MTUM or the S&P 500 focus of SPMO.

MTUM vs SPMO

Two funds, one decision: we compare cost, performance and what each ETF actually holds in September 2026.

Compare MTUM (iShares MSCI USA Momentum Factor ETF) and SPMO (Invesco S&P 500 Momentum ETF) on fees, holdings, dividends, and how each fund tracks its momentum market exposure. Educational content, not financial advice.

Fund Snapshot

Key Fund Metrics

MTUM

Metric

SPMO

0.15%

Expense Ratio

0.13%

0.59%

Dividend Yield

0.72%

$24.80B

Net Assets

$28.85B

129

Holdings

102

Apr 16, 2013

Inception Date

Oct 9, 2015

–

Index Tracked

–

Large Blend

Fund Category

Large Blend

SPMO costs about $2.00 less per year for every $10,000 invested.

Shared Top Holdings

Holding	MTUM	SPMO
AMDAdvanced Micro Devices, Inc.	5.86%	4.49%
MUMicron Technology, Inc.	5.29%	11.09%
INTCIntel Corporation	4.39%	2.88%
JNJJohnson & Johnson	3.35%	4.74%
GOOGLAlphabet Inc.	2.77%	4.51%
XOMExxonMobil Holdings Corporation	2.60%	3.21%

Discover More Comparisons

MTUM vs VFMO

Compare MTUM and VFMO ETFs by fees, holdings, dividends and tracking. MTUM costs 0.15%, VFMO 0.13%, with five shared top holdings and yield details.

QQQM vs SPMO

Compare QQQM and SPMO ETFs. Analyse fees, dividend yields, top holdings and index tracking details. Neutral factual data to support research.

FDMO vs SPMO

Compare FDMO vs SPMO. Review expense ratios, dividend yields, top holdings and market tracking methods. Educational content for informed research.

Investment Analysis

MTUM

Pros

Investors benefit from a large asset base of $24.8 billion, which supports trading liquidity for this momentum strategy.
The fund's $24.8 billion in net assets suggests significant scale, which can help mitigate tracking errors and operational risks for this ETF.
MTUM offers exposure to a momentum factor strategy that tracks the MSCI USA Momentum Index, providing a diversified approach to US equities.

Considerations

With a dividend yield of just 0.59 percent, MTUM is primarily a capital growth vehicle rather than an income source.
Investors in MTUM may experience higher portfolio turnover and associated transaction costs compared to lower turnover strategies.
The fund's sector weights data is currently not available, making it difficult for investors to assess potential sector concentration risks.

SPMO

Pros

SPMO charges an expense ratio of 0.13 percent, which is lower than MTUM's 0.15 percent, potentially benefiting long-term investors.
The fund holds $28.9 billion in net assets, indicating strong investor interest and robust liquidity for trading purposes.
Invesco S&P 500 Momentum ETF maintains the largest net asset value at $28.9 billion, offering significant scale for institutional investors.

Considerations

The fund has a top holding weight of 11.09 percent for MU, indicating a high concentration in a single security.
MTUM has a top holding weight of 5.86 percent for AMD, indicating a high concentration in a single security.
The sector weights for Invesco S&P 500 Momentum ETF are not available, limiting transparency regarding its sector exposure.

About MTUM and SPMO

MTUM (MTUM)

The iShares MSCI USA Momentum Factor ETF is designed for investors looking to capture the performance of US large-cap companies with strong recent price momentum. This fund targets a 'momentum' factor strategy, which is based on the idea that stocks with higher recent returns may continue to outperform those with lower returns over a shorter timeframe. With a low expense ratio of 0.15%, it offers a cost-effective way to gain exposure to this specific investment style. The portfolio is concentrated, holding approximately 129 securities that meet its momentum criteria, differing significantly from broader, more diversified market-cap-weighted funds. Investors should be aware that momentum strategies can be cyclical; while they may outperform in trending markets, they can also lag during periods of sharp reversals or when market leadership changes quickly. As with any equity investment, values can rise and fall, and past performance is not a reliable indicator of future results. This fund is intended as part of a broader investment strategy and may not be suitable for all investors.

SPMO (SPMO)

The Invesco S&P 500 Momentum ETF offers investors exposure to companies within the S&P 500 index that have demonstrated stronger price performance compared to the broader market in recent times. By focusing on stocks with positive momentum trends, the fund aims to capture opportunities in sectors or companies currently experiencing growth or renewed interest. It holds approximately 102 companies, reflecting a diversified approach within the large-cap category. With a low expense ratio of 0.13%, it provides a cost-effective way to gain this specific type of market exposure. Investors should note that while momentum strategies can perform well during trending markets, they may underperform during market reversals or periods of volatility. Values can rise and fall, and past performance is not a guarantee of future results. This ETF is suitable for those interested in understanding systematic investment approaches, keeping risk tolerance in mind.

Buy MTUM or SPMO in Nemo

🆓

Zero Commission

Trade stocks, ETFs, and more with zero commission. Keep more of your returns.

🔒

Trusted & Regulated

Part of Exinity Group 2015, serving over a million customers globally.

💰

6% Interest on Cash

Earn 6% AER on uninvested cash with daily interest payments.

MTUM vs SPMO

Fund Snapshot