What does the term 'momentum' mean in the context of these ETFs?

Momentum is an investment style based on the idea that assets performing well recently will continue to perform well in the short term. These ETFs use specific indices to select stocks showing strong recent price trends. For SPMO, the focus is on momentum within the S&P 500, representing large-cap stocks. XMMO applies the same momentum logic to the S&P MidCap 400, targeting mid-cap equities. The core difference lies in the market capitalisation of the underlying universe, not the fundamental momentum strategy itself, which is similar across both funds.

What is the difference between large-cap and mid-cap stocks?

Large-cap stocks, like those in SPMO, belong to companies with a market capitalisation generally above $10 billion. They are typically established, mature firms with lower volatility and stable earnings. Mid-cap stocks, such as those in XMMO, come from companies with a market capitalisation between $2 billion and $10 billion. These firms are often in a growth phase, offering higher potential returns but also carrying greater risk and volatility compared to large-cap peers. The choice between them depends on the investor's risk tolerance and growth objectives, as mid-caps can be more sensitive to economic cycles.

How do the expense ratios of SPMO and XMMO compare?

SPMO has a lower expense ratio of 0.13%, whereas XMMO's expense ratio is 0.34%. This means XMMO costs 0.21 percentage points more annually. Expense ratios are fees deducted from the fund's assets, impacting overall returns. While 0.21% might seem small, over long investment horizons, the difference compounds. For example, on a $10,000 investment, the annual fee difference is $21. Investors should consider this cost when evaluating long-term performance, especially if the expected excess returns from mid-cap exposure do not outweigh the higher fee burden. Always review fee structures as part of total cost of ownership.

What is the size and liquidity of each fund?

SPMO is significantly larger, with net assets of $28.9 billion, compared to XMMO's $7.0 billion. Larger assets under management generally contribute to better liquidity, meaning it may be easier to buy or sell shares without affecting the market price. Both funds have sufficient scale for most retail investors, but institutional traders might prefer SPMO for deeper liquidity. The size difference also reflects broader market adoption of large-cap momentum strategies versus mid-cap approaches. Liquidity is crucial for minimising trading costs and ensuring fair execution prices, particularly during periods of high market volatility.

How do the top holdings of the two funds differ?

The top holdings illustrate the distinct investment universes. SPMO's largest positions are mega-cap tech and industrial leaders like MU (11.09%) and NVDA (9.02%). In contrast, XMMO holds mid-cap stocks such as FTI (3.87%) and ATI (3.66%), none of which overlap with SPMO's top ten. This zero overlap in top positions highlights the structural difference between large-cap and mid-cap markets. Investors seeking pure mid-cap momentum exposure would look to XMMO, while SPMO provides concentrated access to the largest US companies. The distinct holdings mean the funds' performance drivers are quite different.

What are the dividend yields for SPMO and XMMO?

Both funds offer relatively low dividend yields, with SPMO at 0.72% and XMMO at 0.67%. These figures indicate that neither fund is primarily suited for income-focused investors. Momentum strategies typically favour growth stocks, which often reinvest earnings rather than distributing them as dividends. The slight difference between 0.72% and 0.67% is minimal and may fluctuate over time as stock prices and company payout decisions change. Investors prioritising regular income should look for dedicated dividend or high-yield ETFs, as these momentum funds are designed for capital appreciation through trend-following rather than consistent cash distributions.

Which fund has a longer track record?

XMMO has a substantially longer history, launched in March 2005, compared to SPMO's inception in October 2015. This gives XMMO roughly a decade more of performance data, which can be valuable for assessing how the strategy behaves across different market cycles. SPMO, being newer, has less historical context but still provides data from the post-2015 bull market and subsequent downturns. While a longer track record does not guarantee future performance, it offers more evidence of the fund manager's ability to execute the strategy during various economic conditions, including interest rate shifts and sector rotations.

How do these funds relate to broader market indices?

SPMO tracks the S&P 500 Momentum Index, which filters the large-cap S&P 500 constituents. XMMO tracks the S&P MidCap 400 Momentum Index, focusing on mid-cap companies. The underlying benchmark for SPMO is heavily weighted towards technology and financials, while XMMO's universe includes more industrials, healthcare, and consumer discretionary firms. Neither fund is available with specific index tracking data in the provided snippet, but the category names imply their benchmarks. Understanding the parent index helps investors grasp the risk and return characteristics, as mid-caps often move differently from large-caps during economic expansions or contractions.

What is sector concentration in these funds?

Specific sector weights are not available for either SPMO or XMMO in the provided data. However, looking at the top holdings provides clues. SPMO's top positions are dominated by technology and semiconductor firms (MU, NVDA, AVGO, AMD, GOOGL), suggesting a high tech concentration. XMMO's holdings are more varied, with positions in aerospace (FTI), metals (ATI, HL), and real estate (RGLD), indicating broader exposure across traditional and growth-oriented sectors. Without exact sector weights, investors should review the fund prospectuses to understand the precise industry allocation, as sector tilts significantly impact performance relative to broader indices.

Is there any overlap between the top 10 holdings?

According to the data, there are no shared top-10 holdings between SPMO and XMMO. SPMO's list features large-cap giants like Nvidia and Johnson & Johnson, while XMMO's top positions are mid-cap stocks such as Fluor and Acuity Brands. This lack of overlap reinforces that the two funds serve complementary roles in a portfolio rather than duplicate exposures. An investor holding both would gain diversified momentum exposure across the market-cap spectrum. However, total portfolio diversification also depends on the other 490+ stocks in each fund, which may have some broader overlap, but the core momentum leaders are distinct.

How does fund size impact bid-ask spreads?

Fund size often correlates with trading volume and, consequently, bid-ask spreads. SPMO, with $28.9 billion in assets, likely has very tight spreads due to high trading activity and institutional participation. XMMO, with $7.0 billion, also offers reasonable liquidity, though its spreads might be slightly wider than SPMO's. Bid-ask spreads are the difference between the highest price a buyer offers and the lowest price a seller accepts. For short-term traders, these execution costs matter. For long-term investors, a modest spread difference is usually negligible, but it is still a practical consideration when entering or exiting positions during volatile market conditions.

What should beginners know before choosing between these funds?

Beginners should assess their risk tolerance and investment goals. SPMO offers lower fees (0.13%) and exposure to stable, large-cap companies, suitable for core portfolio holdings. XMMO provides access to mid-cap growth (0.34% fee), which carries higher volatility but potentially greater upside. Neither fund is a 'best' choice universally; it depends on whether the investor wants to anchor their portfolio with blue-chip momentum or diversify with mid-cap momentum. Reviewing inception dates (2015 vs 2005) and dividend yields (0.72% vs 0.67%) helps align expectations with income needs and historical stability.

SPMO vs XMMO

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

Compare Invesco S&P 500 Momentum (SPMO) and Invesco S&P MidCap Momentum (XMMO). We analyse fees, holdings, dividends and market tracking for each fund. Educational content, not financial advice.

Fund Snapshot

Key Fund Metrics

SPMO

Metric

XMMO

0.13%

Expense Ratio

0.34%

0.72%

Dividend Yield

0.67%

$28.85B

Net Assets

$7.04B

102

Holdings

Oct 9, 2015

Inception Date

Mar 3, 2005

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Index Tracked

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Large Blend

Fund Category

Mid-Cap Blend

SPMO costs about $21.00 less per year for every $10,000 invested.

Shared Top Holdings

These funds do not share any of their top holdings.

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Investment Analysis

SPMO

Pros

Invesco's S&P 500 Momentum ETF has a low expense ratio of 0.13%.
With $28.9 billion in net assets, it offers substantial liquidity and scale.
Investing in large-cap companies provides exposure to established sector leaders.

Considerations

The dividend yield of 0.72% is modest for income-focused investors.
Track record is less established with an inception date of October 2015.
Top holdings are concentrated, with the largest position at 11.09%.

XMMO

Pros

XMMO offers exposure to mid-cap companies, which have higher growth potential.
The fund has been around since March 2005, providing a long track record.
Net assets of $7.0 billion still offer sufficient liquidity for most investors.

Considerations

The expense ratio of 0.34% is higher than its large-cap counterpart.
A dividend yield of 0.67% is relatively low for income generation.
Mid-cap stocks typically carry higher volatility risk compared to large-cap equities.

About SPMO and XMMO

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.

XMMO (XMMO)

The Invesco S&P MidCap Momentum ETF aims to track an index composed of mid-capitalisation stocks demonstrating strong price momentum. Investors might consider this fund for potential growth opportunities associated with established yet dynamic companies. With an expense ratio of 0.34%, the fund provides exposure to 77 holdings in the mid-cap blend category. Launched in March 2005, it currently manages approximately USD 7.04 billion in net assets. While the fund offers a modest dividend yield of 0.67%, its primary focus remains on capital appreciation. As with any investment, values can fluctuate based on market conditions, and past performance does not guarantee future results. Always consider personal financial circumstances and seek independent advice before investing.

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SPMO vs XMMO

Fund Snapshot