Looking for broad exposure to the Mid Cap Growth segment of the US equity market? You should consider the Invesco S&P MidCap Momentum ETF (XMMO), a passively managed exchange traded fund launched on 03/03/2005.
The fund is sponsored by Invesco. It has amassed assets over $3.03 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, companies that fall under this category provide a stable and growth-heavy investment.
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. Further, growth stocks have a higher level of volatility associated with them. 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
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are the same.
Annual operating expenses for this ETF are 0.34%, putting it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 0.60%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Industrials sector--about 27% of the portfolio. Financials and Consumer Discretionary round out the top three.
Looking at individual holdings, Williams-Sonoma Inc (WSM) accounts for about 4.67% of total assets, followed by Sprouts Farmers Market Inc (SFM) and Emcor Group Inc (EME).
The top 10 holdings account for about 28.63% 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 has lost about -17.24% so far this year and is down about -10.34% in the last one year (as of 04/09/2025). In the past 52-week period, it has traded between $101.93 and $136.30.
The ETF has a beta of 1.02 and standard deviation of 21.20% 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 an excellent 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 $12.99 billion in assets, iShares Russell Mid-Cap Growth ETF has $14.53 billion. VOT has an expense ratio of 0.07% and IWP charges 0.23%.
Bottom-Line
While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.
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 Reports EMCOR Group, Inc. (EME): Free Stock Analysis Report Williams-Sonoma, Inc. (WSM): Free Stock Analysis Report Sprouts Farmers Market, Inc. (SFM): Free Stock Analysis Report iShares Russell Mid-Cap Growth ETF (IWP): ETF Research Reports Vanguard Mid-Cap Growth ETF (VOT): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).
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