Invesco S&P SmallCap Momentum ETF (XSMO)

Overview

The Invesco S&P SmallCap Momentum ETF (XSMO) seeks to track the investment results of the S&P SmallCap 600 Momentum Index, which is composed of small-capitalization U.S. stocks exhibiting relatively high momentum scores. The fund provides exposure to the small-cap market with a focus on companies demonstrating strong price momentum. It employs a full replication strategy, investing in all securities in the index in proportion to their weighting.

Reputation and Reliability

Invesco is a well-established and reputable global investment management firm with a long track record of providing a wide range of ETF products.

Management Expertise

Invesco has significant experience in managing ETFs across various asset classes and investment strategies, including factor-based and index-tracking approaches.

Goal

To track the investment results of the S&P SmallCap 600 Momentum Index.

Investment Approach and Strategy

Strategy: The ETF tracks the S&P SmallCap 600 Momentum Index, which selects and weights stocks based on their momentum scores.

Composition The ETF primarily holds U.S. small-cap stocks exhibiting high momentum characteristics.

Market Share: XSMO holds a moderate market share within the small-cap momentum ETF segment.

Total Net Assets (AUM): 106120000

Key Competitors

• Avantis U.S. Small Cap Value ETF (AVUV)
• Dimensional U.S. Small Cap ETF (DFAS)
• Vanguard Russell 2000 ETF (VTWO)

Competitive Landscape

The small-cap ETF market is competitive, with several funds offering exposure to various factors and strategies. XSMO competes with other momentum-focused funds, as well as broader small-cap ETFs and value-oriented funds. Its competitive advantage lies in its specific momentum methodology and Invesco's established ETF platform. XSMO is disadvantaged in the small-cap ETF space as it has a lower AUM than many of its key competitors.

Historical Performance: Historical performance data is required from a financial data provider.

Benchmark Comparison: Benchmark comparison data is required from a financial data provider.

Expense Ratio: 0.39

Average Trading Volume

The average trading volume is moderate, indicating adequate liquidity for most investors. The Average Daily Volume is 38,000 as of October 26, 2024.

Bid-Ask Spread

The bid-ask spread is typically tight, reflecting sufficient trading activity and efficient price discovery.

Market Environment Factors

Economic growth, interest rate changes, and investor sentiment towards small-cap stocks and momentum strategies can significantly impact XSMO's performance.

Growth Trajectory

The ETF's growth trajectory depends on the continued popularity of momentum investing and the performance of the S&P SmallCap 600 Momentum Index. Rebalancing may cause changes to strategy and holdings over time.

Competitive Edge

XSMO's competitive edge lies in its focus on small-cap stocks with high momentum, which can potentially deliver strong returns in favorable market conditions. Invesco's established brand and distribution network also contribute to its appeal. The ETF's methodology is transparent and rules-based, providing investors with a clear understanding of its investment approach. The focus on momentum can allow for high returns compared to competitors at times, however it can also expose investors to higher risk.

Volatility

The ETF's volatility is expected to be higher than that of broad market ETFs due to its focus on small-cap stocks and momentum, which can be more sensitive to market fluctuations.

Market Risk

The ETF is subject to market risk, including the risk of declines in the overall stock market and the specific risks associated with small-cap companies, such as lower liquidity and greater sensitivity to economic cycles.

Ideal Investor Profile

XSMO is suitable for investors seeking to enhance their portfolio returns through exposure to small-cap stocks with high momentum. The ideal investor is comfortable with higher levels of volatility and has a long-term investment horizon.

Market Risk

XSMO may be more suitable for active traders or investors with a higher risk tolerance, as its performance can be more volatile than that of broad market ETFs. Investors who are passive index followers and prefer lower volatility may not be suitable for this fund.

The Invesco S&P SmallCap Momentum ETF (XSMO) offers targeted exposure to small-cap U.S. stocks exhibiting high price momentum. It can potentially generate high returns, but also comes with more significant risk, compared to broad market ETFs. The ETF is more volatile and would be more appealing to investors who are looking for more active trading rather than passive index followers. Invesco's established brand and transparent methodology contribute to its attractiveness for investors.

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Data Sources:

• Invesco Official Website
• ETF.com
• Morningstar

Disclaimers:

The data provided is for informational purposes only and does not constitute investment advice. Investment decisions should be based on individual circumstances and consultation with a qualified financial advisor.