iShares MSCI USA Momentum Factor ETF

MTUM

Market cap $20.4B

The Invesco S&P 500 Momentum ETF is rated a buy, while the iShares MSCI USA Momentum Factor ETF receives a hold rating. SPMO offers stronger upside potential, superior risk-adjusted returns, and lower costs due to its high-conviction, semi-annual rebalancing strategy. MTUM's higher turnover and quarterly rebalancing provide flexibility but result in lower performance and similar or higher volatility compared to SPMO.

After 10 years and under $100 million in assets, many ETFs still trading are on life support, before possibly being sent to the graveyard. However, last week assets in the previously obscure iShares Systematic Bond ETF (SYSB) rose approximately ten-fold.

MTUM is a popular $20B large-cap momentum ETF that's comprised of 125 companies with strong short- and long-term risk-adjusted price momentum characteristics. Its expense ratio is 0.15%. MTUM was the second-best-performing momentum fund over the last decade, but several newer funds have surpassed it over the last five. This article compares its fundamentals against four others. One surprising find was that MTUM's short-term momentum statistics don't stand out, a finding possibly caused by the Index's 30% quarterly turnover constraint.

The Invesco S&P 500 High Beta ETF (SPHB) is up a sizzling 27.3% year to date. SPHB targets the stocks in the S&P 500 with the highest sensitivity to market movements, or beta, over the past 12 months.

Value ETFs witness a surge as tech falters, with SPVU, RPV, RZV, RFV and GVLU gaining on rate cut bets and rotation into defensive sectors.

MTUM hits a new 52-week high, up 42% from its low, as bullish market trends lift momentum-focused strategies.

VettaFi's director of research Todd Rosenbluth and Astoria portfolio advisors COO & head of ETFs Bruce Lavine sit down with CNBC's Leslie Picker to discuss new strategies for investors looking to diversify while still trying to stay tax efficient, as well as the growing popularity of momentum ETFs.

VettaFi's Director of Research Todd Rosenbluth and Astoria Portfolio Advisors COO & Head of ETFs Bruce Lavine sit down with CNBC's Leslie Picker to discuss looking beyond cap-weighted ETF giants, and the growing popularity of momentum funds.

The iShares MSCI USA Momentum Factor ETF offers diversified exposure to US large- and mid-cap stocks with strong risk-adjusted momentum, but carries higher volatility. The ETF's high P/E ratio (33x) signals elevated valuations, especially in tech and financials, increasing the risk of sharp corrections if growth expectations falter. Recent performance has lagged peers using pure momentum metrics, partly due to risk-adjusted selection and portfolio turnover limits, despite similar expense ratios.

Momentum investing is well-positioned for strong returns as the S&P 500 uptrend continues, supported by earnings growth and expected rate cuts. Vanguard U.S. Momentum Factor ETF is too diversified, limiting its upside and underperforming both the S&P 500 and peer momentum ETFs. SPMO and MTUM are better momentum ETF options, with higher concentration in mega-cap growth stocks and superior recent performance and risk profiles.