S&P 500 Momentum Index: Can Momentum ETFs Beat the S&P 500?

Calmvestor Insights

What is Momentum Investing?
Momentum investing means “going with the winners.” Instead of buying all the stocks in the S&P 500, you only buy the ones that have performed best recently. The idea is that stocks with strong recent performance will keep doing well in the near future.

What is a Momentum ETF?
A momentum ETF tracks an index that selects stocks based on their momentum. For example, the S&P 500 Momentum Index picks the top 100 stocks from the S&P 500 with the highest momentum. The index is rebalanced twice a year (March and September), and no single stock can be more than 9% of the index.

Popular Momentum ETF: SPMO

• Invesco S&P 500 Momentum ETF (SPMO)Tracks the S&P 500 Momentum IndexLaunched: October 9, 2015Assets: $9.4 billion (as of July 29, 2025)Top holdings (as of July 23, 2025):Nvidia (11%)Amazon (8.64%)Meta (8.45%)Broadcom (5.97%)JPMorgan (5.23%)Tesla (4.36%)Walmart (4.34%)Palantir (3.34%)Netflix (3.27%)Costco (2.40%)The other 90 stocks make up 43% of the fund.

  • Tracks the S&P 500 Momentum Index

  • Launched: October 9, 2015

  • Assets: $9.4 billion (as of July 29, 2025)

  • Top holdings (as of July 23, 2025):Nvidia (11%)Amazon (8.64%)Meta (8.45%)Broadcom (5.97%)JPMorgan (5.23%)Tesla (4.36%)Walmart (4.34%)Palantir (3.34%)Netflix (3.27%)Costco (2.40%)

    • Nvidia (11%)

    • Amazon (8.64%)

    • Meta (8.45%)

    • Broadcom (5.97%)

    • JPMorgan (5.23%)

    • Tesla (4.36%)

    • Walmart (4.34%)

    • Palantir (3.34%)

    • Netflix (3.27%)

    • Costco (2.40%)

  • The other 90 stocks make up 43% of the fund.

Other Popular US Momentum ETFs:

• iShares MSCI USA Momentum Factor ETF (MTUM): 0.15% fee, $17.7B assets

• Invesco S&P 500 Momentum ETF (SPMO): 0.13% fee, $9.4B assets

• Invesco S&P MidCap Momentum ETF (XMMO): 0.34% fee, $4B assets

• iShares MSCI Intl Momentum Factor ETF (IMTM): 0.30% fee, $3B assets

• Invesco S&P SmallCap Momentum ETF (XSMO): 0.39% fee, $1.7B assets

• Invesco Dorsey Wright Momentum ETF (PDP): 0.62% fee, $1.7B assets

• JPMorgan U.S. Momentum Factor ETF (JMOM): 0.12% fee, $1.6B assets

• Vanguard U.S. Momentum Factor ETF (VFMO): 0.13% fee, $1.1B assets

Pros of Momentum ETFs:

• Focus on stocks with strong recent performance

• Clear, rules-based selection (not emotional)

• Still diversified (100 stocks from different sectors)

• Potential to outperform the regular S&P 500 (SPMO beat S&P 500 from 2015–2025)

Cons of Momentum ETFs:

• Can lose a lot if trends change quickly

• More volatile than regular S&P 500

• Higher fees (0.12%–0.62% vs. 0.02% for regular S&P 500 ETFs)

Performance Comparison (2015–2025):

• SPMO (Momentum ETF): +357.32%

• SPY (Regular S&P 500 ETF): +212.52%(Data from Oct 12, 2015 to July 29, 2025)

How to Buy a Momentum ETF:

1. Open a brokerage account (US or Israeli brokers)

2. Deposit funds

3. Search for the ETF symbol (e.g., SPMO)

4. Place your order (LMT or MKT order)

Bottom Line:
The regular S&P 500 is simple, cheap, and very diversified. The S&P 500 Momentum Index is more niche, more volatile, and can outperform in certain years, but also carries more risk and higher fees. If you believe in “riding the winners” and can handle the ups and downs, a momentum ETF could be a good addition to your portfolio.

Performance Chart:

• SPMO (blue line): +357.32%

• SPY (purple line): +212.52%(Oct 12, 2015 – July 29, 2025)

This is not investment advice. Past performance does not guarantee future results. Always do your own research before investing.