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Vanguard U.S. Momentum Factor ETF (VFMO) is downgraded from Buy to Hold due to lagging performance and late momentum capture. VFMO's diversified small- and mid-cap exposure is a distinct strength versus large-cap heavy peers, potentially positioning it for future outperformance. Recent top holdings like Sandisk, Valero, and Marathon Petroleum were added after substantial rallies, limiting upside if catalysts fade.
The Vanguard U.S. Momentum Factor ETF invests in stocks that are already going up. It encompasses around 700 of them.
You don't have to pick individual stocks to have a good shot at outperforming the market.
Vanguard has long been well-known for its lineup of broad-based, ultra-low-cost index funds and ETFs. It has an underrated lineup too: The Vanguard U.S. Momentum Factor ETF and Vanguard U.S. Multifactor ETF.
Vanguard US Momentum Factor ETF is upgraded to buy, poised for its highest annual return in 2026 amid strong multi-cap momentum. VFMO's diversified exposure across large, mid, and small caps, combined with a quantitative momentum strategy, supports robust performance and downside mitigation. VFMO trades at lower valuations (25x earnings, 3.8x book) versus benchmarks, with a low 0.13% expense ratio and strong liquidity.
Most investors have probably never heard of this Vanguard ETF, but it routinely beats the market.
Vanguard US Momentum Factor ETF continues to outperform peers and the S&P 500, delivering a 13% YTD return. I reiterate a "Buy" rating on VFMO, citing attractive valuation (P/E < 20x, PEG 1.36x), robust momentum, and strong technicals. VFMO offers diversified exposure across market caps and sectors, with a modified equal-weight approach limiting concentration risk.
The Vanguard U.S. Momentum Factor ETF is actively managed. It looks for the best performing stocks over recent time periods.