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Should Invesco S&P MidCap Momentum ETF (XMMO) Be on Your Investing Radar?
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Looking for broad exposure to the Mid Cap Growth segment of the US equity market? You should consider the Invesco S&P MidCap Momentum ETF (XMMO - Free Report) , a passively managed exchange traded fund launched on 03/03/2005.
The fund is sponsored by Invesco. It has amassed assets over $1.02 billion, making it one of the average sized ETFs attempting to match the Mid Cap Growth segment of the US equity market.
Why Mid Cap Growth
Compared to large and small cap companies, mid cap businesses tend to have higher growth prospects and are less volatile, respectively, with market capitalization between $2 billion and $10 billion. These types of companies, then, have a good balance of stability and growth potential.
Qualities of growth stocks include faster growth rates compared to the broader market, as well as higher valuations and higher than average sales and earnings growth rates. Something to keep in mind is the higher level of volatility that is affiliated with growth stocks. They are likely to outperform value stocks in strong bull markets but over the longer-term, value stocks have delivered better returns than growth stocks in almost all markets.
Costs
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Annual operating expenses for this ETF are 0.33%, putting it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.60%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Industrials sector--about 25.80% of the portfolio. Financials and Healthcare round out the top three.
Looking at individual holdings, Reliance Steel & Aluminum Co (RS - Free Report) accounts for about 4.01% of total assets, followed by Axon Enterprise Inc (AXON - Free Report) and Lincoln Electric Holdings Inc (LECO - Free Report) .
The top 10 holdings account for about 24% of total assets under management.
Performance and Risk
XMMO seeks to match the performance of the S&P MIDCAP 400 MOMENTUM INDEX before fees and expenses. The S&P Midcap 400 Momentum Index is composed of securities with strong growth characteristics selected from the Russell Midcap Index.
The ETF has lost about -1.87% so far this year and is down about -4.87% in the last one year (as of 05/17/2023). In the past 52-week period, it has traded between $68.65 and $83.42.
The ETF has a beta of 1.01 and standard deviation of 22.82% for the trailing three-year period. With about 78 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco S&P MidCap Momentum ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, XMMO is a great option for investors seeking exposure to the Style Box - Mid Cap Growth segment of the market. There are other additional ETFs in the space that investors could consider as well.
The Vanguard Mid-Cap Growth ETF (VOT - Free Report) and the iShares Russell Mid-Cap Growth ETF (IWP - Free Report) track a similar index. While Vanguard Mid-Cap Growth ETF has $9.76 billion in assets, iShares Russell Mid-Cap Growth ETF has $11.87 billion. VOT has an expense ratio of 0.07% and IWP charges 0.23%.
Bottom-Line
While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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Should Invesco S&P MidCap Momentum ETF (XMMO) Be on Your Investing Radar?
Looking for broad exposure to the Mid Cap Growth segment of the US equity market? You should consider the Invesco S&P MidCap Momentum ETF (XMMO - Free Report) , a passively managed exchange traded fund launched on 03/03/2005.
The fund is sponsored by Invesco. It has amassed assets over $1.02 billion, making it one of the average sized ETFs attempting to match the Mid Cap Growth segment of the US equity market.
Why Mid Cap Growth
Compared to large and small cap companies, mid cap businesses tend to have higher growth prospects and are less volatile, respectively, with market capitalization between $2 billion and $10 billion. These types of companies, then, have a good balance of stability and growth potential.
Qualities of growth stocks include faster growth rates compared to the broader market, as well as higher valuations and higher than average sales and earnings growth rates. Something to keep in mind is the higher level of volatility that is affiliated with growth stocks. They are likely to outperform value stocks in strong bull markets but over the longer-term, value stocks have delivered better returns than growth stocks in almost all markets.
Costs
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Annual operating expenses for this ETF are 0.33%, putting it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.60%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Industrials sector--about 25.80% of the portfolio. Financials and Healthcare round out the top three.
Looking at individual holdings, Reliance Steel & Aluminum Co (RS - Free Report) accounts for about 4.01% of total assets, followed by Axon Enterprise Inc (AXON - Free Report) and Lincoln Electric Holdings Inc (LECO - Free Report) .
The top 10 holdings account for about 24% of total assets under management.
Performance and Risk
XMMO seeks to match the performance of the S&P MIDCAP 400 MOMENTUM INDEX before fees and expenses. The S&P Midcap 400 Momentum Index is composed of securities with strong growth characteristics selected from the Russell Midcap Index.
The ETF has lost about -1.87% so far this year and is down about -4.87% in the last one year (as of 05/17/2023). In the past 52-week period, it has traded between $68.65 and $83.42.
The ETF has a beta of 1.01 and standard deviation of 22.82% for the trailing three-year period. With about 78 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco S&P MidCap Momentum ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, XMMO is a great option for investors seeking exposure to the Style Box - Mid Cap Growth segment of the market. There are other additional ETFs in the space that investors could consider as well.
The Vanguard Mid-Cap Growth ETF (VOT - Free Report) and the iShares Russell Mid-Cap Growth ETF (IWP - Free Report) track a similar index. While Vanguard Mid-Cap Growth ETF has $9.76 billion in assets, iShares Russell Mid-Cap Growth ETF has $11.87 billion. VOT has an expense ratio of 0.07% and IWP charges 0.23%.
Bottom-Line
While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.