Ought to Invesco S&P MidCap Momentum ETF (XMMO) Be on Your Investing Radar?

In search of broad publicity to the Mid Cap Progress section of the US fairness market? It’s best to contemplate the Invesco S&P MidCap Momentum ETF (XMMO), a passively managed change traded fund launched on 03/03/2005.

The fund is sponsored by Invesco. It has amassed belongings over $4.65 billion, making it one of many bigger ETFs trying to match the Mid Cap Progress section of the US fairness market.

Why Mid Cap Progress

Mid cap firms, with market capitalization within the vary of $2 billion and $10 billion, supply buyers many issues that small and enormous firms do not, together with much less danger and better development alternatives. Thus, firms that fall beneath this class present a steady and growth-heavy funding.

Qualities of development shares embody sooner development charges in comparison with the broader market, in addition to increased valuations and better than common gross sales and earnings development charges. One thing to bear in mind is the upper degree of volatility that’s affiliated with development shares. In comparison with worth shares, development shares are a safer guess in a powerful bull market, however do not carry out as strongly in nearly all different monetary environments.

Prices

Buyers must also take note of an ETF’s expense ratio. Decrease value merchandise will produce higher outcomes than these with a better value, assuming all different metrics stay the identical.

Annual working bills for this ETF are 0.34%, placing it on par with most peer merchandise within the house.

It has a 12-month trailing dividend yield of 0.31%.

Sector Publicity and High Holdings

Whereas ETFs supply diversified publicity, which minimizes single inventory danger, a deep look right into a fund’s holdings is a precious train. And, most ETFs are very clear merchandise that disclose their holdings every day.

This ETF has heaviest allocation to the Financials sector–about 27.30% of the portfolio. Industrials and Shopper Discretionary spherical out the highest three.

particular person holdings, Williams-Sonoma Inc (WSM) accounts for about 4.58% of complete belongings, adopted by Emcor Group Inc (EME) and Sprouts Farmers Market Inc (SFM).

The highest 10 holdings account for about 28.42% of complete belongings beneath administration.

Efficiency and Danger

XMMO seeks to match the efficiency of the S&P MIDCAP 400 MOMENTUM INDEX earlier than charges and bills. The S&P Midcap 400 Momentum Index consists of securities with robust development traits chosen from the Russell Midcap Index.

The ETF has gained about 6.46% to this point this 12 months and is up roughly 35.21% within the final one 12 months (as of 02/07/2025). Previously 52-week interval, it has traded between $99.75 and $136.30.

The ETF has a beta of 1.02 and normal deviation of 21.07% for the trailing three-year interval. With about 77 holdings, it successfully diversifies company-specific danger.

Alternate options

Invesco S&P MidCap Momentum ETF holds a Zacks ETF Rank of two (Purchase), which relies on anticipated asset class return, expense ratio, and momentum, amongst different elements. Due to this, XMMO is an excellent choice for buyers looking for publicity to the Fashion Field – Mid Cap Progress section of the market. There are different extra ETFs within the house that buyers might contemplate as properly.

The Vanguard Mid-Cap Progress ETF (VOT) and the iShares Russell Mid-Cap Progress ETF (IWP) observe an identical index. Whereas Vanguard Mid-Cap Progress ETF has $16.46 billion in belongings, iShares Russell Mid-Cap Progress ETF has $18.82 billion. VOT has an expense ratio of 0.07% and IWP costs 0.23%.

Backside-Line

An more and more in style choice amongst retail and institutional buyers, passively managed ETFs supply low prices, transparency, flexibility, and tax effectivity; they’re additionally wonderful autos for long run buyers.

To be taught extra about this product and different ETFs, display for merchandise that match your funding aims and browse articles on newest developments within the ETF investing universe, please go to Zacks ETF Center.