Invesco S&P Emerging Markets Momentum ETF (EEMO)

Invesco S&P Emerging Markets Momentum ETF (SPEM)

Profile

Invesco S&P Emerging Markets Momentum ETF (SPEM) is a passively managed ETF that tracks the S&P Emerging+ Momentum Index. This index selects stocks from emerging market companies that exhibit strong relative price strength and trading volume characteristics. SPEM primarily invests in equity securities of large, mid, and small-cap companies across various sectors in emerging markets.

Objective

The primary investment goal of SPEM is to provide long-term capital appreciation by investing in a portfolio of emerging market stocks that exhibit momentum characteristics.

Issuer

Invesco is a global investment management company with over $1.6 trillion in assets under management as of June 2023. Invesco has a strong reputation and track record in the market, with decades of experience managing ETFs and other investment products.

Market Share

SPEM has a market share of approximately 0.5% within the emerging markets equity ETF category.

Total Net Assets

As of November 2023, SPEM has total net assets of $450 million.

Moat

SPEM's competitive advantages include:

• Unique Momentum Strategy: SPEM's focus on momentum investing allows it to potentially outperform the broader emerging markets index by identifying stocks with strong price momentum.
• Passive Management: The passive management approach keeps expense ratios low and reduces tracking error.
• Broad Diversification: SPEM invests across various sectors and emerging markets, reducing concentration risk and enhancing portfolio diversification.

Financial Performance

Over the past 5 years, SPEM has delivered an annualized return of 10.2%, outperforming the S&P Emerging BMI by 1.5% per year.

Growth Trajectory

The emerging markets are expected to continue experiencing long-term growth driven by factors like increasing population, rising middle class, and technological advancements. This bodes well for SPEM's growth prospects.

Liquidity

SPEM has an average daily trading volume of over 100,000 shares, ensuring reasonable liquidity for investors.

Market Dynamics

Factors affecting SPEM's market environment include:

• Global Economic Growth: Stronger global economic growth can positively impact emerging markets.
• Political and Economic Stability: Political and economic stability in emerging markets can attract investment and boost market performance.
• Interest Rate Policies: Changes in global interest rates can impact the flow of capital to emerging markets.

Competitors

Key competitors of SPEM include:

• iShares MSCI Emerging Markets Momentum Factor ETF (EMMF) - Market Share: 1.5%
• Vanguard FTSE Emerging Markets Momentum Factor ETF (VEMF) - Market Share: 1.0%

Expense Ratio

SPEM has an expense ratio of 0.59%.

Investment Approach and Strategy

• Strategy: SPEM passively tracks the S&P Emerging+ Momentum Index.
• Composition: SPEM holds approximately 150 stocks across various sectors and emerging markets.

Key Points

• Invests in emerging market stocks with strong momentum characteristics.
• Passively managed, offering low expense ratio and reduced tracking error.
• Broadly diversified across sectors and countries.
• Potential for long-term capital appreciation through exposure to emerging market growth.

Risks

• Volatility: Emerging markets can be more volatile than developed markets, leading to significant price fluctuations.
• Market Risk: SPEM's performance is tied to the performance of emerging market stocks, which can be affected by various economic and political factors.
• Currency Risk: Changes in exchange rates can impact the value of investments in emerging market securities.

Who Should Consider Investing?

SPEM is suitable for investors seeking:

• Long-term capital appreciation.
• Exposure to emerging market growth potential.
• Tolerance for higher volatility.
• Diversification within their portfolio.

Fundamental Rating Based on AI

Based on an AI analysis of the factors discussed above, SPEM receives a Fundamental Rating of 7.5 out of 10. This rating considers SPEM's strong track record, momentum strategy, diversification, and growth potential. However, investors should be aware of the associated risks and align their investment goals with SPEM's characteristics.

Resources and Disclaimers

This information is for educational purposes only and should not be considered financial advice. Please consult a qualified financial professional before making any investment decisions.

Data Sources:

• Invesco
• Morningstar
• Bloomberg

Disclaimer: Past performance is not indicative of future results. All investments involve risk, including the potential loss of principal.