Summary
SPMO Chart
SPMO: 54 Substitutions This September Reconstitution, Here's What It Means
The Index tracked by the Invesco S&P 500 Momentum Index underwent a semi-annual reconstitution after business close Friday, resulting in 54 substitutions and roughly 40% of the portfolio. Apple and Merck were the top additions, while Nvidia was deleted despite an excellent one-year gain of 30.24%. Micron Technology is still in the #2 spot with an 8.99% weighting. This article also evaluates SPMO from a fundamentals perspective. Overall, it looks slightly weaker than before, but it's still 52% in tech, and its GARP and quality statistics remain strong.
SPMO: Becoming A Memory Trade
The Invesco S&P 500 Momentum ETF remains a compelling buy, offering concentrated exposure to top-performing S&P 500 momentum names. SPMO's upcoming September rebalance is likely to further overweight semiconductors and energy, intensifying its divergence from the broader S&P 500. Recent performance highlights SPMO's efficiency in capturing rallies, with a 19.6% total return over twelve months and strong net inflows of $6.3B.
SPMO: Micron Rewrites The Fund's Valuation Story
I'm maintaining my buy on SPMO. I'm bullish through year-end and still see the S&P 500 at or above 8,500, with the fund's own earnings growth carrying it. SPMO's look-through forward P/E of 17.3x reads cheaper than SPY's 20.2x. Strip Micron, and it jumps to 21.7x. Strip the memory names, and it hits 22.7x. Micron is roughly 10% of the fund and sits mid-supercycle. That one weight drags the portfolio multiple down and pulls the earnings growth line up.
Invesco S&P 500 Momentum ETF Investors
| Name | Quantity | Cost | Value | Profit ($) | Gain (%) |
|---|---|---|---|---|---|
| TJD Thomas John Drogan PR Inc.IPAL SECURITIES Inc. | 5,457 | $665,827.68 | $786,790.26 | $120,962.58 | 18.17% |
| BZ Brandon Zatopek Commonwealth Equity Services LLC | 631,935 | $102.08M | $91.74M | -$10.34M | -10.13% |
| TC Tyler Chaisson COMPASS CAPITAL Corp. /MA/ /ADV | 1,738 | $215,684.37 | $247,378.25 | $31,693.88 | 14.69% |
| KW Kevin Warman INVESTMENT MANAGEMENT Corp. /VA/ /ADV | 6,765 | $810,399.8 | $969,898.05 | $159,498.25 | 19.68% |
| JD Jim Dushek HARBOUR INVESTMENTS Inc. | 93,707 | $9.65M | $13.6M | $3.96M | 41% |
Invesco S&P 500 Momentum ETF (SPMO) FAQ
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Invesco S&P 500 Momentum ETF Profile
| ARCA Exchange | US Country |
Overview
The company described appears to be focused on investment management, specifically through a fund that aims to mirror the performance of a momentum-based index. This investment strategy hinges on the momentum factor, which is predicated on the belief that stocks that have shown better performance in the recent past are likely to continue performing well in the near future. The fund commits to investing at least 90% of its total assets in the securities included in the underlying index, which consists of approximately 100 stocks from the S&P 500® Index selected for their high momentum scores. However, it is noted that the fund is non-diversified, implying that it concentrates its investments in a relatively small number of securities, which can lead to greater volatility in its performance.
Products and Services
- Momentum-based Investment Fund
This product is an investment fund that strategically allocates its assets to stocks selected for their high momentum scores, as defined by their recent performance history. The fund targets stocks within the S&P 500® Index, aiming to replicate the performance of an underlying momentum index. This investment approach leans on the theory that stocks which have performed well recently are likelier to continue their outperformance in the short to medium term. The fund's strategy involves a high degree of focus on a subset of around 100 stocks, reflecting its commitment to momentum investing. It is noteworthy that this product is non-diversified, indicating a concentration in these momentum-picked securities which might result in higher volatility compared to more diversified investments.
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