Riding the Momentum Wave: Inside Invesco’s High-Conviction ETF Strategy

The Invesco S&P 500 Momentum ETF (SPMO) targets large-cap U.S. companies demonstrating significant price momentum. This investment vehicle, managing $13.46 billion in assets with an expense ratio of 0.13%, capitalizes on the momentum phenomenon—the tendency of securities with recent outperformance to maintain their upward trajectory.

A substantial portfolio rebalancing occurred in September 2025, implementing notable adjustments to the fund's holdings. The ETF maintains a highly concentrated approach, with its ten largest positions accounting for more than 54% of total assets. This significant allocation reflects a deliberate strategy of placing concentrated momentum bets rather than pursuing broad diversification.

The fund's semi-annual rebalancing mechanism ensures ongoing alignment with evolving market leadership patterns, systematically capturing shifting momentum trends across the S&P 500 universe.

Should investors sell immediately? Or is it worth buying Invesco S&P 500® Momentum ETF?

Concentration: The Double-Edged Sword

This high-conviction methodology represents both the fund's core strength and primary risk. With over half its assets committed to just ten holdings, the ETF achieves maximum leverage during sustained trending periods. However, this focused approach also increases vulnerability to abrupt momentum reversals.

The disciplined, twice-yearly rebalancing provides structural safeguards against drifting strategy implementation. Nevertheless, questions remain about whether this frequency offers sufficient agility during periods of exceptional market volatility.

Current Market Dynamics

Present market conditions have proven favorable for momentum strategies, with robust quarterly earnings and technological breakthroughs fueling continued advances in companies exhibiting persistent upward trends. The ETF benefits from an environment that distinctly rewards market leaders while penalizing laggards, creating ideal conditions for momentum factor investing.