In 2024, VO delivered a solid 25% total return. Sounds great, right? But then I stumbled on something that made me stop cold… ❄️
Another ETF, drawing from the exact same S&P 500 universe, but using a completely different stock selection method, posted a jaw-dropping 46% return that year.
Same market. Same pool of companies. Almost double the gains. And this isn’t some leveraged, high-risk, gambling-on-tech ETF. Nope. It’s quietly boring—so boring most investors haven’t even heard of it. Yet, over the past decade, this fund has consistently outperformed the S&P 500, reshaping what passive investing can look like.
Most people treat VO like the finish line. Buy it, hold forever, don’t ask questions. Warren Buffett recommends it. Every personal finance blog repeats the mantra. And for decades, it worked beautifully. But here’s the secret no one tells you: playing it safe comes with hidden costs.
Quick disclaimer: I’m not a financial adviser. This is not financial advice. Always do your own research. ✅
The fund I’m talking about? SPMO – Invesco S&P 500 Momentum ETF.
At first glance, it’s from the same S&P 500 universe as VO. But the selection and weighting rules make all the difference.
So, what’s the gap looking like? Let’s break it down:
This year: SPMO ~25% total return, VO ~17%
Past decade: SPMO ~17.5% annualized, VO ~14.5%
3 percentage points might not sound like much… until you see compounding in action.
Take Harry, for example. He invested $10,000 in VO 10 years ago. Today? About $39,000. Not bad. But with SPMO? Over $52,000—that’s an extra $13,000 from the same starting point.
Stretch this over 20 years and the gap becomes mind-blowing: potentially $100,000+ difference. Same money, same patience, but a completely different result. 💸
What SPMO Does Differently
While VO holds all 500 S&P stocks weighted by market cap, SPMO filters down to the ~100 strongest performers, based purely on measurable price momentum.
Every March & September, it runs a momentum screen:
Measures each stock’s 12-month price strength
Adjusts for volatility
Keeps only the top 100 performers
Ditches fading stocks
Think of it as an all-star team re-selected every 6 months—no guesses, no opinions, just rules-based, transparent methodology.
Right now, SPMO’s portfolio reads like a highlight reel of market winners:
Broadcom 11%
Nvidia 9%
Meta, JP Morgan, Palantir, Netflix, Walmart
Sector allocation shifts with momentum: tech, financials, communication services—but the fund doesn’t pick favorites, it follows the data. 📊
Risk & Reward
You might think momentum ETFs crash harder in bear markets… but historical data says otherwise:
2022 market dip: VO down ~18%, SPMO down ~10%
2020 pandemic crash: SPMO rebounded faster due to positioning in leading recovery stocks
Why? Momentum strategies don’t predict the future. They react systematically to existing trends.
But yes, there are trade-offs:
Expense ratio: 0.13% (VO: 0.03%)
Concentration risk: ~100 stocks, top 10 = 60% of portfolio
Yield ~0.65% (not for dividend hunters)
SPMO is not a replacement for a core portfolio. Think of it as a performance tilt to enhance returns while maintaining a solid foundation.
How Investors Use SPMO
Harry experimented with allocations:
80% VO / 20% SPMO: Upside potential, lower volatility
70/30 or 50/50: More performance boost but more swings
Key: It refines a portfolio, doesn’t replace it
SPMO rewards patience and systematic investing, not guessing or timing the market.
Bottom Line
VO gives you the full S&P 500, safe & steady. SPMO gives you a momentum edge, with higher potential returns—and higher concentration risk. Over decades, this simple tilt can add tens of thousands of dollars to your portfolio.
If you’re curious to explore SPMO or other ETFs like this, check out moomoo for a seamless way to invest. 💥
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