SPMO Real Returns Since 2015 – Is Momentum Worth It?

SPMO has outperformed the S&P 500 since it launched in October 2015. If you’d put $10,000 into SPMO back in 2015, it would have grown to $45,700. That same $10,000 invested into SPY would have grown to $32,730. That’s a difference of almost $13,000!

So is SPMO just a better investment? Is momentum investing the secret to outperform the market?

I analyzed the returns of SPMO and compared them to other benchmarks to see how it performed.

What is SPMO?

SPMO is the Invesco S&P 500 Momentum ETF. It launched in October 2015.

SPMO tracks the S&P 500 Momentum Index. The S&P 500 Momentum Index is a collection of about 100 stocks in the S&P 500 that have shown the strongest “momentum” for the past twelve months.

What Does “Momentum” Actually Mean in This Index?

So what is momentum? How is momentum actually calculated? Does the Index just buy more of whatever stocks are doing well?

Here’s how the S&P 500 Momentum Index works.

The S&P 500 Momentum Index looks at the past 12 months of price performance for every stock in the S&P 500 (it skips the most recent month). Then it adjusts that performance for how volatile the stock’s been. Stocks that have steady price increases do better than those that spike up and down.

The top 100 stocks by that score make the list.

This process is done twice a year when the ETF is rebalanced in March and September.

What’s interesting is that SPMO doesn’t just pick the stocks with the best momentum score. It weighs them by multiplying their momentum score by their market capitalization. That means a massive company with decent momentum can end up with a bigger slice of the fund than a smaller company with amazing momentum.

What does that mean in practice? It means SPMO ends up loaded into whatever’s already the biggest and already winning. Right now, that’s tech. SPMO has almost 18% more weighting in technology than the S&P 500.

SPMO doesn’t include whatever stocks have the highest momentum in the stock market, it applies its own strategy to select stocks in the S&P 500 that have demonstrated smooth momentum over the past 12 months.

It also deliberately excludes stocks in the S&P 400 (mid-caps) and S&P 600 (small-caps).

Technically it’s not a true momentum strategy, but a filtered large-cap momentum play.

SPMO’s Real Returns Since Inception (November 2015 to December 2025)

Here’s the full picture since SPMO launched, measured against the S&P 500, gold, inflation (CPI), and the money supply (M2).

SPMO outperformed all of the benchmarks since its inception.

However, this period includes two separate investment eras which I will break down more below.

How SPMO Performed in the Second Era (November 2015 to March 2020)

I refer to the years between 2013 to March 2020 (before the Covid stimulus and CARES Act) as the second era of investing because this is when debt-to-GDP was hovering around 100% and interest rates were near zero.

Here’s how SPMO performed with low interest rates and before debt-to-GDP spiked above 120%.

SPMO outperformed all of the benchmarks during this period.

SPMO outperformed SPY by 2.51%, which is less than the long-term outperformance since inception (3.75%).

What’s interesting to point out is that SPMO only slightly outperformed GLD (by 0.38%) and M2 (by 1.22%).

Remember that the global economy collapsed after the 2008 financial crisis and it took awhile for the recovery to really begin. This could be why the outperformance wasn’t as large compared to inception or during the third era.

How SPMO Performed in the Third Era (April 2020 to December 2025)

The third era starts after COVID relief kicked in and US debt-to-GDP crossed over 120%.

[How I view investing in the third era we are currently in.]

Here’s how SPMO performed against the benchmarks.

Now we see the gap between SPMO and SPY widen. SPMO outperformed SPY by 5.01%.

The difference between SPMO and M2 exploded as well. During the second era, the gap was only 1.22%. During the third era, that difference rose to 16.27%. That difference represents real wealth created by SPMO.

Is SPMO’s Strategy Sustainable, or Is It Riding a Moment?

I’ve actually thought about this a lot recently. It has really tested the limits of my executive function.

I haven’t come to a clean conclusion as to my opinion on SPMO. I go back and forth between it being an obvious choice over SPY versus it being a product of its time.

On one side, investing in SPMO makes sense when you think about how the ETF works. You’re basically trying to catch the ride up of companies that have been performing well. SPMO has the built-in criteria where the ride up has to be smooth rather than bumpy up and down.

For the past decade, technology companies have dominated the market. SPMO isn’t a technology fund, it’s just heavily concentrated in tech because those companies have performed the best.

It’s the same with the S&P 500. The index is heavily concentrated in technology because that’s what people are investing in.

So it might just mean that SPMO is a more concentrated S&P 500 fund that focuses on recent winners.

Here’s something else to think about.

Let’s say technology crashes and another industry rises to fill the void. It could be biotechnology, nuclear energy, or whatever you want.

Those companies and industries would increase in market cap and become a bigger share of the S&P 500 while technology drops. SPMO would judge those companies and add them based on their momentum score and market cap.

We would be in the same situation. SPMO and SPY would be concentrated in whatever the new hot industry is. That’s just how the market works.

However, this assumes that the market will behave as it had in the past. No one knows what’s going to happen in the future. Ten years of data is relatively small compared to how long markets have been around.

Here’s some more questions to ask yourself:

What’s the role of passive investing in the performance of SPMO? If people just keep buying the market each month (that already favors large-caps), shouldn’t you just go with SPMO to ride the winners up?

What would happen if the market goes sideways for a considerable amount of time? How would SPMO react? Would the twice a year rebalancing be enough?

How will the US debt-to-GDP effect SPMO? What about interest rates? How would higher rates effect the performance?

These are all questions that I’m still thinking about. I haven’t made up my mind on the answers.

My gut tells me that SPMO might have some built-in advantages over SPY, but is it worth it to risk my money on? I’m not sure.