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The Invesco S&P SmallCap Momentum ETF (the Fund) seeks to mirror the performance of the S&P Smallcap 600 Momentum Index (the Index). To achieve this objective, the Fund pledges to invest a minimum of 90% of its total capital in the constituent securities of the Index. The Index itself comprises 120 stocks selected from the broader S&P SmallCap 600 Index. These holdings are chosen based on their superior "momentum scores," which are calculated by assessing each security's upward price movements in comparison to other eligible stocks within the S&P SmallCap 600 Index. Both the Fund and its underlying Index are adjusted and re-evaluated on a semi-annual basis.
Is XSMO's expense ratio expensive, average, or a steal for its category?
Pro reveals the verdict on a 5-tier spectrum calibrated against ICI 2025 industry averages, with strategy-aware bands so the comparison is meaningful.
Invesco S&P SmallCap Momentum ETF offers efficient small-cap exposure by filtering for profitable, high-momentum companies, outperforming standard small-cap indices. XSMO's semi-annual rebalancing and sector tilts—especially toward industrials, healthcare, and IT—drive its performance but introduce concentration and timing risks. Despite a higher expense ratio (0.36%) than peers, XSMO has delivered a 280.8% total return over the past decade, far outpacing traditional small-cap ETFs.
The Invesco S&P SmallCap Momentum ETF (XSMO) was launched on March 3, 2005, and is a passively managed exchange traded fund designed to offer broad exposure to the Small Cap Growth segment of the US equity market.
Designed to provide broad exposure to the Small Cap Growth segment of the US equity market, the Invesco S&P SmallCap Momentum ETF (XSMO) is a passively managed exchange traded fund launched on March 3, 2005.
Momentum investing is often viewed as a large-cap-only concept. Conversations about its applications via ETFs often lead to products such as the Invesco S&P 500 Momentum ETF (SPMO).
The Invesco S&P SmallCap Momentum ETF (XSMO), which is the number 1 ranked product on Seeking Alpha's Quant rating table of small-cap ETFs, is outperforming the Russell 2000 by 1.55x this year. XSMO's portfolio construction emphasizes risk-adjusted momentum and quality, avoiding micro-caps and loss-making stocks, while also tilting towards those with a persistent long-term trend. High annual turnover (115%) and semi-annual rebalancing introduce potential drag and lag in responding to momentum shifts.