The Invesco S&P MidCap Momentum ETF (XMMO) was launched on March 3, 2005, and is a passively managed exchange traded fund designed to offer broad exposure to the Mid Cap Growth segment of the US equity market.
The fund is sponsored by Invesco. It has amassed assets over $4.58 billion, making it one of the larger ETFs attempting to match the Mid Cap Growth segment of the US equity market.
Why Mid Cap Growth
With market capitalization between $2 billion and $10 billion, mid cap companies usually contain higher growth prospects than large cap companies, and are considered less risky than their small cap counterparts. Thus they have a nice balance of growth potential and stability.
Growth stocks have higher than average sales and earnings growth rates. While these are expected to grow faster than the broader market, they also have higher valuations. Something to keep in mind is the higher level of volatility that is affiliated with growth stocks. They are likely to outperform value stocks in strong bull markets but over the longer-term, value stocks have delivered better returns than growth stocks in almost all markets.
Costs
When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.
Annual operating expenses for this ETF are 0.39%, putting it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 0.75%.
Sector Exposure and Top Holdings
ETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Industrials sector -- about 24.4% of the portfolio. Financials and Consumer Staples round out the top three.
Looking at individual holdings, Emcor Group Inc (EME) accounts for about 4.35% of total assets, followed by Guidewire Software Inc (GWRE) and Comfort Systems Usa Inc (FIX).
The top 10 holdings account for about 28.45% of total assets under management.
Performance and Risk
XMMO seeks to match the performance of the S&P MIDCAP 400 MOMENTUM INDEX before fees and expenses. The S&P Midcap 400 Momentum Index is composed of securities with strong growth characteristics selected from the Russell Midcap Index.
The ETF return is roughly 8.08% so far this year and is up about 10.88% in the last one year (as of 10/13/2025). In the past 52-week period, it has traded between $101.93 and $137.26.
The ETF has a beta of 1.05 and standard deviation of 19.66% for the trailing three-year period. With about 77 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco S&P MidCap Momentum ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, XMMO is a great option for investors seeking exposure to the Style Box - Mid Cap Growth segment of the market. There are other additional ETFs in the space that investors could consider as well.
The Vanguard Mid-Cap Growth ETF (VOT) and the iShares Russell Mid-Cap Growth ETF (IWP) track a similar index. While Vanguard Mid-Cap Growth ETF has $17.99 billion in assets, iShares Russell Mid-Cap Growth ETF has $20.51 billion. VOT has an expense ratio of 0.07% and IWP charges 0.23%.
Bottom-Line
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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Invesco S&P MidCap Momentum ETF (XMMO): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).
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