What is a momentum ETF and how do SPMO and VFMO implement this strategy?

A momentum ETF aims to hold stocks that have recently outperformed, based on the idea that winning stocks may continue to win in the short term. SPMO applies this logic to large-cap S&P 500 constituents, while VFMO applies it to US mid-cap companies. Both seek to capture price trends rather than fundamental value, meaning they can perform well in trending markets but may lag during sharp reversals. Their strategies differ mainly in the market-cap universe each one targets.

What does 'index tracked' tell me and why is it not available for these funds?

The 'index tracked' field indicates the benchmark a fund aims to replicate or reference. It helps investors understand whether the fund passively mirrors an index or follows a rules-based strategy. For SPMO and VFMO, this specific index name is marked as not available in the provided dataset. However, we know SPMO focuses on S&P 500 momentum and VFMO on US mid-cap momentum factors. Always check the fund provider's official documentation for precise index details, as this information can change over time.

How do large-cap and mid-cap momentum exposures differ in terms of risk?

Large-cap stocks, like those potentially in SPMO, are generally more established, liquid, and stable but may offer slower growth. Mid-cap stocks, targeted by VFMO, are smaller and often have more growth potential but can experience higher price swings and lower liquidity. In a momentum context, this means VFMO's holdings might react more volatilely to market sentiment than SPMO's mega-cap technology and industrial names. Investors should weigh their risk tolerance when choosing between large-cap and mid-cap exposure within a momentum framework.

How do SPMO's and VFMO's expense ratios compare, and what does this mean for returns?

Both SPMO and VFMO have a low expense ratio of 0.13%. Since the fees are identical, the cost difference over time is effectively zero. This means neither fund has a fee advantage, and returns would likely be driven by market performance, momentum factor efficacy, and portfolio construction, rather than expense drag. Identical fees make cost a neutral factor, allowing investors to focus on other aspects like market-cap exposure, holdings concentration, and historical performance when evaluating these momentum ETFs for their portfolios.

Which stocks appear in the top 10 of both SPMO and VFMO?

Four stocks appear in the top 10 holdings of both funds: Micron Technology (MU), Advanced Micro Devices (AMD), Lam Research (LRCX), and Intel (INTC). However, their weights differ significantly. For example, MU is 11.09% of SPMO but only 1.22% of VFMO, and AMD is 4.49% in SPMO versus 1.15% in VFMO. This overlap indicates both funds favour these tech names on momentum, but SPMO concentrates more heavily, reflecting its large-cap focus versus VFMO's more spread-out mid-cap holdings.

How do SPMO and VFMO dividend yields compare and what should I consider?

SPMO's dividend yield is 0.72%, while VFMO's is 0.61%. The difference is 0.11 percentage points, which is modest. For most momentum investors, the primary goal is price appreciation rather than income, as momentum strategies often reinvest gains. However, if income is a consideration, the slightly higher yield in SPMO could be marginally better, though the total return from capital gains would likely dominate over time. Both funds distribute dividends, but their yields remain relatively low compared to income-focused ETFs.

How do SPMO's and VFMO's holdings concentration and diversification compare?

SPMO is more concentrated: its top ten holdings (e.g., MU, NVDA, AVGO) make up over 50% of the fund, with MU alone at 11.09%. This concentration means SPMO's performance depends heavily on a few large-cap tech and industrial stocks. In contrast, VFMO is more diversified, with its largest holding at just 1.24%. This spreads risk across many mid-caps but may dilute the impact of top performers. Concentration can amplify momentum returns but also increases single-stock risk.

How does SPMO's size affect trading compared to VFMO?

SPMO has net assets of $28.9 billion, while VFMO has $1.9 billion. The larger size of SPMO typically means higher trading volume and tighter bid-ask spreads, making it easier to buy or sell shares without moving the price much. This can be beneficial for investors trading larger amounts or requiring quick execution. VFMO, while still considered liquid enough for most investors, might have slightly higher trading costs for very large orders due to lower asset size and potentially lower daily volume.

How does momentum exposure to S&P 500 versus US mid-caps affect performance?

SPMO's exposure to large-cap S&P 500 momentum means it participates in the moves of mega-cap tech and industrials, which often drive major market rallies. During broad bull markets, these names tend to perform strongly. VFMO's mid-cap focus offers access to companies further down the growth curve, which may outperform during early-stage economic recoveries or periods when investors rotate out of crowded large-caps. Each fund reacts differently depending on whether large-cap or mid-cap sectors lead the momentum cycle.

Do SPMO and VFMO have different risks from being momentum-based ETFs?

Both funds carry the risk of momentum reversal. When a trend changes abruptly, ETFs that chase recent winners may experience large losses. The difference is that SPMO's heavy concentration in a few mega-cap tech and industrial stocks means a reversal in, for instance, NVDA or MU could have an outsized impact. In contrast, VFMO's more evenly spread mid-cap holdings mean that losses may be diluted across many positions, reducing single-stock risk. Thus, SPMO has a larger concentration risk.

How do inception dates of SPMO (2015) and VFMO (2018) affect track-record comparisons?

SPMO's inception on 9 October 2015 gives it a longer track record than VFMO's 13 February 2018, allowing observation across more market cycles, including periods of high volatility and sharp momentum changes. VFMO's shorter history means its behaviour in certain market conditions (e.g., prolonged mid-cap underperformance) may not yet be visible. When comparing these funds, SPMO's extra years of data offer more evidence of how it handled past momentum regimes, while VFMO's results reflect a narrower sample period.

What educational disclaimer should I keep in mind when comparing SPMO and VFMO?

This FAQ and comparison are for educational purposes only and are not investment advice. Information about SPMO and VFMO, such as expense ratios, holdings, and yields, is based on provided fund data and market trends. Past performance does not predict future returns. Investors should consider their own risk tolerance, time horizon, and financial goals, and consult qualified financial professionals before making investment decisions. Market conditions and fund characteristics may change.

SPMO vs VFMO

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

Compare SPMO (Invesco S&P 500 Momentum ETF) and VFMO (Vanguard U.S. Momentum Factor ETF) on fees, holdings, dividends, and tracking. SPMO is large blend, VFMO mid-cap blend, both with a 0.13% expense ratio. Explore top stocks like MU, AMD, LRCX, and INTC. Educational content, not financial advice.

Fund Snapshot

Key Fund Metrics

SPMO

Metric

VFMO

0.13%

Expense Ratio

0.13%

0.72%

Dividend Yield

0.61%

$28.85B

Net Assets

$1.92B

102

Holdings

673

Oct 9, 2015

Inception Date

Feb 13, 2018

–

Index Tracked

–

Large Blend

Fund Category

Mid-Cap Blend

Both funds charge the same annual fee.

Shared Top Holdings

Holding	SPMO	VFMO
MUMicron Technology, Inc.	11.09%	1.22%
AMDAdvanced Micro Devices, Inc.	4.49%	1.15%
LRCXLam Research Corporation	3.07%	1.02%
INTCIntel Corporation	2.88%	1.11%

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Investment Analysis

SPMO

Pros

SPMO offers a substantial $28.9 billion in net assets, which enhances institutional confidence and trading depth.
The fund's 0.13% expense ratio is competitive with the broader market and matches its primary momentum rival, VFMO.
SPMO provides significant exposure to mega-cap technology and industrial leaders, which are often momentum market outperformers.

Considerations

Top holdings are highly concentrated, with the ten largest positions representing more than 50% of the fund's total assets.
SPMO's yield of 0.72% is modest compared to its market-neutral or income-focused peers in the same asset class.
It has an inception date of October 9, 2015, meaning it has a shorter performance record compared to many established ETFs.

VFMO

Pros

VFMO is issued by Vanguard, a firm recognised globally for its low-cost and high-transparency approach to fund management.
With a $1.9 billion net asset value, VFMO is considered liquid enough for retail and institutional investors to trade efficiently.
VFMO targets mid-cap companies, offering a less crowded and potentially more diversified approach than S&P 500-focused strategies.

Considerations

VFMO's inception date of February 13, 2018, means it has a relatively limited track record of performance in different market cycles.
The fund's dividend yield of 0.61% is slightly lower than its large-cap counterpart, potentially limiting income generation for investors.
Holding weights are spread more thinly across the mid-cap universe, resulting in no single holding having a material market impact.

About SPMO and VFMO

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.

VFMO (VFMO)

The Vanguard U.S. Momentum Factor ETF (VFMO) is a fund designed to capture the momentum factor within the U.S. equity market. Momentum is an investment style that seeks to hold securities with high short- and long-term price performance, assuming that winners tend to continue outperforming. This fund provides diversified exposure through approximately 673 holdings, primarily focused on mid-cap blend equities. With a competitive expense ratio of 0.13% and net assets of USD 1.92 billion, it offers a low-cost avenue for investors interested in this specific factor strategy. Launched in February 2018, the fund pays a dividend yield of 0.61%. As with any investment, values can fluctuate, and past performance is not indicative of future results.

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SPMO vs VFMO

Fund Snapshot