You know VOO, right? That boring-but-trusted S&P 500 ETF that Warren Buffett swears by. In 2024, it delivered around 25% total return—not bad at all.
But here’s the kicker… another ETF pulling from the exact same S&P 500 universe returned almost 46% that same year. Yup, almost double the gains.
And no, it’s not some crazy leveraged fund or speculative tech gamble. It’s so quietly boring that most investors haven’t even heard of it. Yet, over the past decade, this ETF has outperformed the S&P 500 consistently—enough to make you rethink passive investing.
Why Everyone Treats VOO as the “Finish Line”
Most people buy VOO, hold forever, and never question it. It’s stable, simple, and proven. For decades, this advice worked beautifully.
But here’s what nobody tells you: playing it safe has hidden costs.
The ETF: SPMO (Invesco S&P 500 Momentum ETF)
At first glance, it looks just like VOO—it’s still the S&P 500. But under the hood? Totally different methodology.
SPMO doesn’t hold all 500 companies. Instead, it:
Screens every S&P 500 stock twice a year (March & September)
Measures 12-month price momentum and adjusts for volatility
Keeps the top 100 winners, removes laggards
Think of it as an all-star team picked every six months based purely on performance data. No guesswork. No fund manager intuition. Everything is rules-based and transparent.
The Performance Gap
Check the numbers:
SPMO: ~25% total return this year
VOO: ~17%
Over the past 10 years:
SPMO annualized: 17.5%
VOO annualized: 14.5%
3% difference might not sound huge… but thanks to compound interest, it matters A LOT.
💡 Example: $10,000 invested 10 years ago:
VOO → $39,000
SPMO → $52,000
That’s $13,000 extra—just by tilting toward momentum. Over 20 years, the difference could explode to over $100,000.
What Makes SPMO Different?
SPMO is constantly adapting:
Top holdings change every 6 months
Sector allocations shift based on momentum, not opinions
Tech, finance, communication… all rotating dynamically
It reacts to what’s already winning, not predicting the future. This approach also helped limit losses during downturns:
2022 market drop: VOO -18%, SPMO -10%
Pandemic crash 2020: SPMO recovered faster thanks to positioning in top-performing sectors
The math speaks for itself: smaller losses = faster recovery = years of compound growth preserved.
What to Know Before Investing
SPMO isn’t perfect:
Expense ratio: 0.13% vs. VOO’s 0.03%
Concentration risk: top 10 holdings = ~60% of fund
Lower dividend yield (~0.65% vs VOO’s ~1.3%)
It’s not for everyone, and you shouldn’t put your entire portfolio here. Think of it as a performance tilt on a solid foundation of broad index investing.
Example allocations that have worked for investors:
80% VOO / 20% SPMO → moderate upside, low volatility
70% VOO / 30% SPMO → higher growth potential, slightly more swings
50/50 → higher risk/reward for long-term accumulation
Why This Matters
Investing isn’t just about being safe. Comfort can hide opportunity costs, quietly eroding your potential wealth over decades. SPMO shows that a small, systematic adjustment to your portfolio can make a huge difference over time.
If you’re curious and want to explore SPMO or add momentum exposure to your portfolio, check it out on Moomoo here: https://j.moomoo.com/0xFRE4 🚀
💬 Question for you: Do you stick to plain index ETFs like VOO, or are you experimenting with strategies like momentum to boost returns? Drop your thoughts—I’d love to hear how you structure your core portfolio!
