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Should Invesco S&P MidCap Momentum ETF (XMMO) Be on Your Investing Radar?
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The Invesco S&P MidCap Momentum ETF (XMMO - Free Report) was launched on 03/03/2005, and is a passively managed exchange traded fund designed to offer broad exposure to the Mid Cap Growth segment of the US equity market.
The fund is sponsored by Invesco. It has amassed assets over $1.20 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
Mid cap companies have market capitalization between $2 billion and $10 billion. They usually have higher growth prospects than large cap companies and are less volatile than small cap companies. 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. Compared to value stocks, growth stocks are a safer bet in a strong bull market, but don't perform as strongly in almost all other financial environments.
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 0.34%, putting it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 0.78%.
Sector Exposure and Top Holdings
ETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Industrials sector--about 36.30% of the portfolio. Consumer Discretionary and Financials round out the top three.
Looking at individual holdings, Deckers Outdoor Corp (DECK - Free Report) accounts for about 4.64% of total assets, followed by Super Micro Computer Inc (SMCI - Free Report) and Reliance Steel & Aluminum Co (RS - Free Report) .
The top 10 holdings account for about 31.02% 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 added roughly 2.25% so far this year and it's up approximately 22.18% in the last one year (as of 01/22/2024). In the past 52-week period, it has traded between $71.28 and $91.83.
The ETF has a beta of 0.98 and standard deviation of 21.73% for the trailing three-year period. With about 73 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 an excellent 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 $11.71 billion in assets, iShares Russell Mid-Cap Growth ETF has $14.26 billion. VOT has an expense ratio of 0.07% and IWP charges 0.23%.
Bottom-Line
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.
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?
The Invesco S&P MidCap Momentum ETF (XMMO - Free Report) was launched on 03/03/2005, and is a passively managed exchange traded fund designed to offer broad exposure to the Mid Cap Growth segment of the US equity market.
The fund is sponsored by Invesco. It has amassed assets over $1.20 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
Mid cap companies have market capitalization between $2 billion and $10 billion. They usually have higher growth prospects than large cap companies and are less volatile than small cap companies. 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. Compared to value stocks, growth stocks are a safer bet in a strong bull market, but don't perform as strongly in almost all other financial environments.
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 0.34%, putting it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 0.78%.
Sector Exposure and Top Holdings
ETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Industrials sector--about 36.30% of the portfolio. Consumer Discretionary and Financials round out the top three.
Looking at individual holdings, Deckers Outdoor Corp (DECK - Free Report) accounts for about 4.64% of total assets, followed by Super Micro Computer Inc (SMCI - Free Report) and Reliance Steel & Aluminum Co (RS - Free Report) .
The top 10 holdings account for about 31.02% 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 added roughly 2.25% so far this year and it's up approximately 22.18% in the last one year (as of 01/22/2024). In the past 52-week period, it has traded between $71.28 and $91.83.
The ETF has a beta of 0.98 and standard deviation of 21.73% for the trailing three-year period. With about 73 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 an excellent 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 $11.71 billion in assets, iShares Russell Mid-Cap Growth ETF has $14.26 billion. VOT has an expense ratio of 0.07% and IWP charges 0.23%.
Bottom-Line
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.
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.