SPMO ETF Rallies 35% in a Year, Oracle and Visa Join While Amazon and Tesla Exit

SPMO ETF Price Performance and Market Standing

The Invesco S&P 500 Momentum ETF (NYSEARCA:SPMO) has solidified its place as one of the most dynamic smart-beta funds in the U.S. market. Trading at $122.12, the ETF has delivered a 28.82% year-to-date gain and an impressive 35.48% 1-year return, easily outpacing the S&P 500’s 13.26% over the same period. With $13.22 billion in assets under management (AUM), SPMO has transitioned into a heavyweight among momentum-driven strategies. Its trading volume has also remained healthy, averaging over $49 million daily, underscoring strong institutional demand.

Portfolio Rebalance: Big Tech Exits, New Leaders Enter

SPMO’s September rebalance marked a turning point. The fund trimmed exposure to former growth icons like Amazon (NASDAQ:AMZN) and Tesla (NASDAQ:TSLA), signaling a shift away from volatility-heavy mega caps. Instead, inflows rotated toward more stable high-momentum leaders, including Oracle (NYSE:ORCL), Visa (NYSE:V), Cisco (NASDAQ:CSCO), and CrowdStrike (NASDAQ:CRWD). These additions align with the fund’s strategy of capturing relative strength within the S&P 500. The largest position, Broadcom (NASDAQ:AVGO), now commands 9.5% weighting, reflecting its AI-driven revenue acceleration.

Sector Exposure and Concentration Risks

Despite diversification efforts, SPMO remains heavily tilted toward technology, which makes up 24% of holdings, followed by financials at 17%, consumer discretionary at 15%, and healthcare at 12%. This sector distribution mirrors current market leadership but also exposes the ETF to sharp rotations if macroeconomic conditions shift. Importantly, SPMO caps its top holdings to prevent single-stock overconcentration, though Broadcom’s near-double-digit weight shows the extent to which momentum has clustered around AI-related names.

Valuation Metrics vs. Broader Market

SPMO trades at a P/E ratio of 26.3, notably higher than the S&P 500’s 20.1, reflecting the premium investors pay for momentum exposure. The price-to-book ratio at 4.5 also signals a tilt toward growth-heavy companies. Dividend yield stands at 0.98%, making income a minor part of the strategy. The higher valuation multiples underscore the reliance on continued earnings acceleration from top positions like NVIDIA (NASDAQ:NVDA), Broadcom, and Oracle.

Institutional Demand and Flows

ETF flow data reveals that institutions have been steadily accumulating SPMO throughout 2025. Over the last quarter alone, the fund attracted more than $1.3 billion in new money, reflecting increased appetite for systematic, rules-based strategies in volatile markets. The fact that SPMO has now quadrupled its AUM over the last five years highlights both its strong performance record and the growing popularity of factor-based ETFs among hedge funds and pension managers.

Comparison to Peers in the Smart-Beta Space

Relative to peers like MTUM (iShares MSCI USA Momentum Factor ETF), SPMO has consistently outperformed on a 3-year and 5-year basis. For instance, over the last 5 years, SPMO delivered 105.3% total return compared to MTUM’s 72.1%. Its sharper focus on high-momentum U.S. large-cap names has allowed it to capture rallies more efficiently, though at the cost of higher turnover—currently 125% annually, meaning the entire portfolio effectively reshuffles more than once per year.

Forward Outlook for SPMO ETF

Momentum factors tend to perform best in environments of clear market leadership and trend persistence, conditions currently driven by AI, semiconductors, and digital infrastructure. With NVIDIA and Broadcom continuing to report blockbuster earnings and enterprise spending on AI expanding, SPMO is positioned to ride this tailwind. However, risks remain: if the Federal Reserve cuts rates aggressively, leadership may rotate toward more defensive or cyclical names, potentially dragging SPMO’s performance.

Given the data, the ETF remains a Buy for trend-following investors with a tolerance for higher turnover and valuation premiums. At $122.12, with momentum firmly intact, the fund is likely to keep outperforming the S&P 500 into year-end, barring a sharp reversal in macro policy or sector leadership.

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