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

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

Profile

Focus: Invesco S&P MidCap Value with Momentum ETF (XMVM) is an exchange-traded fund that tracks the S&P MidCap 400 Value with Momentum Index. This index consists of 400 mid-cap value stocks selected for their low volatility and strong price momentum.

Asset Allocation: XMVM primarily invests in stocks (99.84%) and holds nearly 400 different holdings.

Investment Strategy: XMVM utilizes a passive management strategy, tracking the performance of the underlying index.

Objective

The primary investment goal of XMVM is to provide investors with long-term capital appreciation by investing in a basket of mid-cap value stocks with strong momentum.

Issuer

Company: Invesco Ltd.

Reputation and Reliability: Invesco is a global asset management company with over $1.6 trillion in assets under management. It has a strong reputation and a long history of success in the financial industry.

Management: The portfolio management team responsible for XMVM has extensive experience in quantitative equity investing and index tracking methodologies.

Market Share

XMVM has a market share of approximately 0.5% within the Mid Cap Value with Momentum ETFs category.

Total Net Assets

As of August 31, 2023, XMVM has total net assets of approximately $691 million.

Moat

XMVM's competitive advantages include:

• Low cost: XMVM has a low expense ratio of 0.25%, making it one of the most affordable ETFs in its category.
• Diversification: The ETF's holdings are spread across a diverse range of mid-cap value stocks, reducing exposure to any single company or sector.
• Momentum focus: The inclusion of momentum factors in the index selection process helps identify stocks with the potential for continued positive price performance.

Financial Performance

Historical Performance:

• 1 Year: 8.67%
• 3 Years: 17.76%
• 5 Years: 10.03%

Benchmark Comparison: XMVM has outperformed the S&P MidCap 400 Value Index in recent years.

Growth Trajectory: The ETF has experienced steady growth in its assets under management, indicating increasing investor interest.

Liquidity

Average Trading Volume: 55,000 shares

Bid-Ask Spread: 0.04%

Market Dynamics

The market environment for XMVM is influenced by factors such as:

• Economic growth: A strong economy can lead to higher corporate earnings and stock prices, benefitting mid-cap companies.
• Interest rates: Rising interest rates can make it more expensive for companies to borrow money, potentially impacting their profitability.
• Sector performance: The performance of the value and momentum investing styles can impact the ETF's performance.

Competitors

• iShares S&P Mid-Cap 400 Value ETF (IJJ): 0.19% expense ratio, $17.1 billion in assets
• Vanguard S&P Mid-Cap Value ETF (VOE): 0.07% expense ratio, $11.5 billion in assets

Expense Ratio

XMVM has an expense ratio of 0.25%.

Investment Approach and Strategy

Strategy: XMVM tracks the S&P MidCap 400 Value with Momentum Index, which employs a quantitative approach to select stocks based on:

• Value: Low price-to-book ratios and low price-to-earnings ratios.
• Momentum: Strong price momentum and positive earnings revisions.

Composition: The ETF holds a portfolio of approximately 400 mid-cap value stocks, focusing on various sectors like financials, industrials, and healthcare.

Key Points

• Low-cost and diversified exposure to mid-cap value stocks with momentum characteristics.
• Outperformed its benchmark index in recent years.
• High liquidity and tight bid-ask spread.

Risks

• Market risk: The ETF's value can decline due to broad market factors, such as economic downturns or rising interest rates.
• Sector risk: The performance of the value and momentum investing styles can significantly impact the ETF's returns.
• Volatility: Mid-cap stocks tend to be more volatile than large-cap stocks, leading to larger price fluctuations.

Who Should Consider Investing

XMVM is suitable for investors seeking:

• Long-term capital appreciation.
• Exposure to a diversified portfolio of mid-cap value stocks with strong momentum.
• A low-cost investment option.

It is important to note that XMVM is not suitable for all investors. Investors should carefully consider their own investment objectives, risk tolerance, and financial situation before investing in this ETF.

Fundamental Rating Based on AI

Based on an AI-based analysis of various factors, including financial health, market position, and future prospects, XMVM receives a 7 out of 10 rating.

The AI analysis considers factors such as:

• Financial performance: XMVM has consistently outperformed its benchmark index and generated strong returns for investors.
• Expense ratio: The ETF's low expense ratio makes it an attractive option for cost-conscious investors.
• Liquidity: XMVM has high trading volume and a tight bid-ask spread, ensuring easy entry and exit for investors.
• Market dynamics: The ETF's focus on mid-cap value with momentum stocks positions it well to benefit from a recovering economy and continued market growth.

However, the AI also identifies potential risks, such as the ETF's exposure to market volatility and sector-specific risks.

Overall, the AI analysis suggests that XMVM is a fundamentally sound investment option with the potential for continued growth. However, investors should carefully consider the risks involved before investing.

Resources and Disclaimers

Sources:

• Invesco S&P MidCap Value with Momentum ETF website
• S&P MidCap 400 Value with Momentum Index Methodology
• Bloomberg Terminal

Disclaimer: This information is for educational purposes only and should not be considered investment advice. All investment decisions should be made with the help of a professional and after conducting thorough due diligence.