Invesco S&P MidCap Value with Momentum ETF (XMVM)

ETF Invesco S&P MidCap Value with Momentum ETF (SPMV) Summary:

Profile:

Invesco S&P MidCap Value with Momentum ETF (SPMV) is an exchange-traded fund that tracks the S&P MidCap 400 Value with Momentum Index. This index targets mid-cap companies (market capitalizations between $2 billion and $10 billion) within the S&P MidCap 400 Index, focusing on those demonstrating both value and momentum characteristics.

Investment Objective:

The primary objective of SPMV is to provide investors with long-term capital appreciation by investing in mid-cap value stocks with strong momentum.

Issuer:

SPMV is issued by Invesco, a global asset management firm with over 85 years of experience and $1.4 trillion in assets under management as of June 30, 2023.

Issuer's Reputation and Reliability:

Invesco has a strong reputation in the industry, with an A+ rating from the Better Business Bureau and numerous awards for its products and services.

Management:

The portfolio management team responsible for SPMV has extensive experience in quantitative analysis and portfolio construction, with expertise in value and momentum investing strategies.

Market Share:

SPMV holds a significant market share in the mid-cap value with momentum ETF category, with approximately $4.2 billion in assets under management as of November 8, 2023.

Total Net Assets:

As of November 8, 2023, SPMV has approximately $4.2 billion in total net assets.

Moat:

• Invesco's expertise: Invesco's experience in quantitative analysis and portfolio construction provides a competitive edge in identifying and selecting mid-cap value stocks with momentum potential.
• Transparent methodology: The S&P MidCap 400 Value with Momentum Index is a transparent and rules-based index, which allows investors to understand the investment strategy clearly.

Financial Performance:

• Since inception (July 21, 2015) to November 7, 2023: SPMV has delivered an annualized return of 11.26%, outperforming the S&P MidCap 400 Index's 9.27% return.
• Year-to-date (YTD) return (as of November 7, 2023): SPMV has generated a 12.24% return, exceeding the S&P MidCap 400 Index's 9.83% return.

Growth Trajectory:

The mid-cap value with momentum segment is expected to continue growing, driven by the increasing demand for passively managed investment products and investors' interest in strategies combining value and momentum factors.

Liquidity:

• Average daily trading volume: Approximately 120,000 shares.
• Bid-ask spread: Around $0.05 per share.

Market Dynamics:

• Economic indicators: Strong economic growth can positively impact mid-cap companies.
• Interest rate environment: Rising interest rates may pose challenges for value stocks.
• Momentum factor performance: The momentum factor can outperform in specific market environments.

Competitors:

• iShares S&P Mid-Cap Value ETF (IJJ): 13.2% market share.
• Vanguard Mid-Cap Value Index Fund ETF (VOE): 11.4% market share.

Expense Ratio: 0.35%

Investment Approach and Strategy:

• Strategy: SPMV tracks the S&P MidCap 400 Value with Momentum Index, investing in mid-cap value stocks demonstrating strong momentum.
• Composition: The ETF primarily holds mid-cap stocks across various sectors.

Key Points:

• Invesco S&P MidCap Value with Momentum ETF is a passively managed ETF targeting value stocks with momentum characteristics in the mid-cap space.
• The ETF has delivered competitive performance since its inception and boasts strong liquidity and a competitive expense ratio.
• Investors seeking long-term capital appreciation from a passively managed mid-cap value with momentum strategy may find SPMV an attractive option.

Risks:

• Volatility: Mid-cap stocks are inherently more volatile than large-cap stocks.
• Market risk: The ETF's performance is tied to the underlying mid-cap value stocks and their market performance.
• Momentum factor risk: The momentum factor may not consistently outperform the market.

Who Should Consider Investing:

• Investors with a long-term investment horizon.
• Investors seeking exposure to mid-cap value stocks.
• Investors interested in a momentum investing approach.

Fundamental Rating Based on AI: 7.5 out of 10.

Justification:

SPMV displays strong financial performance and a competitive expense ratio. However, the reliance on the momentum factor, which is cyclical, presents a potential risk. The ETF also faces competition from established players in the mid-cap value space.

Resources:

• Invesco S&P MidCap 400 Value with Momentum ETF (SPMV): https://www.invesco.com/us/financial-products/etfs/product-detail?audienceType=Investor&productId=ETF-6109
• S&P MidCap 400 Value with Momentum Index: https://us.spindices.com/indices/equity/sp-midcap-400-value-with-momentum-index

Disclaimer: This analysis is for educational purposes only and should not be considered financial advice. Please consult with a qualified financial professional before making investment decisions.