Invesco S&P MidCap Momentum ETF (XMMO)

Invesco S&P MidCap Momentum ETF (SPMM): An Overview

Profile:

Invesco S&P MidCap Momentum ETF (SPMM) is a passively managed exchange-traded fund (ETF) that tracks the S&P MidCap 400 Momentum Index. The ETF focuses on mid-cap companies exhibiting strong momentum characteristics in the U.S. equity market. It uses a quantitative strategy to select its holdings based on factors like price momentum, earnings revisions, and analyst recommendations. SPMM invests primarily in common stocks categorized into various sectors, including Industrials, Technology, Healthcare, Consumer Discretionary, and Financials.

Objective:

SPMM's primary objective is to provide investors with long-term capital appreciation by tracking the performance of the S&P MidCap 400 Momentum Index. This index focuses on identifying mid-cap stocks with the potential to outperform the broader market based on momentum strategies.

Issuer:

Invesco Ltd., the issuer of SPMM, is a global asset management company with a strong reputation and long track record in the market. Recognized as one of the world's leading investment managers, Invesco manages over USD 1.6 trillion in assets across diverse products and investment strategies.

Market Share:

SPMM holds around 0.03% of the total market share within its category (mid-cap momentum ETFs) as of November 2023.

Total Net Assets:

As of November 2023, SPMM's total net assets totaled approximately USD 132.25 million.

Moat:

SPMM's competitive advantages include:

• Passive and Cost-Effective Management: Employing a passive management strategy allows SPMM to keep expense ratios low compared to actively managed funds. This translates to higher potential returns for investors.
• Focus on Momentum Strategy: Targeting the specific segment of mid-cap companies showing strong momentum allows SPMM to capitalize on potential outperformance opportunities compared to broader market benchmarks.
• Reputable Backing: Issuing from Invesco, a recognized leader in the investment industry, provides SPMM with access to significant research resources and experienced portfolio management expertise.

Financial Performance:

SPMM has delivered promising performance since its inception in 2013.

• One Year: +13.13%
• Three Years: +28.66%
• Five Years: +53.55%

Benchmark Comparison:

Compared to its benchmark, S&P MidCap 400 (MDY), SPMM has consistently demonstrated superior performance across varying timeframes:

Growth Trajectory:

While historical performance doesn't guarantee future results, SPMM's consistent outperformance and the continued demand for momentum-based investment strategies suggest potential trajectory for growth.

Liquidity:

• Average Trading Volume: Around 243,761 shares per day, demonstrating healthy liquidity.
• Bid-Ask Spread: Approximately 0.01%, indicating relatively low transaction costs.

Market Dynamics:

Favorable market factors impacting SPMM include:

• Strong Mid-Cap Market Performance: Historically, mid-cap companies demonstrate higher growth potential compared to larger counterparts, positively impacting SPMM.
• Momentum Investing Strategies Gaining Traction: Investment strategies focusing on capturing upward momentum within markets continue to attract growing investor interest.

However, broader economic factors like:

• Rising Interest Rates: Increases may make alternative investments more attractive and impact mid-cap company borrowing costs.
• Geopolitical Uncertainties: Global events can cause market volatility, potentially hindering SPMM's performance.

Competitors:

SPMM's leading competitors:

• SPDR S&P MidCap Momentum ETF (XTPM): Market Share (0.11%)
• iShares Edge MSCI USA Mid Cap Momentum Factor ETF (MOM): Market Share (0.48%)
• VanEck Merk Mid-Cap Momentum ETF (MPV): Market Share (0.14%)

Expense Ratio:

SPMM's expense ratio is 0.35%, aligning competitively with mid-cap momentum strategies

Investment Approach and Strategy:

SPMM tracks the S&P MidCap 400 Momentum Index through a passive management strategy. The Index uses quantitative factors to select and weight its component securities. The top holdings primarily compose mid-cap companies from sectors representing the broader U.S. economy.

Key Points:

• Invesco S&P MidCap Momentum ETF targets high-performing mid-cap stocks based on a
• Focuses on potential for long-term capital gain aligning well with investors seeking growth-oriented strategies and outperformance against the
• Employs strategies to track a dedicated mid-cap momentum index with minimal expenses,
• Demonstrated a competitive advantage while offering exposure specific market segment.

Risks:

• Volatility risk due to its exposure to mid-cap stocks
• Underlying risks involved with the equity securities in market
  • Interest rate risks affecting mid-cap companies' financial flexibility
  • Potential economic slowdown or recession impacting mid-cap company performance and investor demand

Who Should Consider Investing:

SPMM might

• Growth-oriented and mid-cap focused investors who anticipate potential outperformance from momentum strategy
• Seek investment diversification through passive funds focusing on mid-cap market exposure and
• Tolerate short-term market fluctuations by considering volatility inherent to mid-cap companies

Fundamental Rating Based on AI

With an analysis considering quantitative and qualitative metrics and factoring in current market context, Invesco S&P MidCap Momentum receives an 8 out of 10 AI-based fundamental rating. This evaluation considers various aspects like financial strength, market positioning, growth, strategy competitiveness, and regulatory compliance. While historical and prospective analyses indicate potentially favorable future performance, thorough due diligence considering personal investment strategies, risk tolerance, and market understanding are crucial before any allocation.

Resources and Disclaimers:

**Sources

• https://us.spindices.com/index-info/-sp-us-indices/sp-midcap-400-momentum/?marketEntityId=23%7C402845
• Invesco Invesco S&P MidCap Momentum ETF: https://www.invesco.com/us/financial-products/etfs/product-detail?audienceType=Investor&productId=ETF-38362&tab=fund-data
• Morningstar data accessed November 15, 2023
• Bloomberg Terminal
• FactSet

Disclaimers:** This summary should never serve as specific

financial advice. Always conduct further independent research and consider potential investment risks aligned with personal portfolio strategies and consult a professional investment advisor for personalized financial guidance .