Forget SPY. Its Momentum Cousin Is Crushing the Index With 26% Returns This Year, for Only 0.13%

Quick Read

• SPMO has surged 26% twelvemonth to day versus SPY's 10%, and implicit 10 years it has much than doubled SPY's 247% full return.

• SPMO's 100-stock attraction and semi-annual rebalancing tin origin crisp lag during enactment shifts and make higher superior gains distributions successful taxable accounts.

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The SPDR S&P 500 ETF Trust (NYSEARCA:SPY) is the default equity holding for tens of millions of investors, and for defensible reasons: it tracks the S&P 500 astatine an disbursal ratio of 0.0945%, offers heavy liquidity, and closed astatine $749.17 connected July 13, 2026. Yet SPY holders person softly missed the marketplace this year. A adjacent cousin, inactive built from the aforesaid 500 stocks, is up much than 2 and a fractional times arsenic overmuch year-to-date. The alternate sits wrong the S&P family, costs astir 4 ground points more, and rotates connected a rules-based docket that astir SPY owners person ne'er examined.

That money is the Invesco S&P 500 Momentum ETF (NYSEARCA:SPMO), and the spread betwixt the 2 successful 2026 is the crushed to look closely.

Why SPY Still Deserves Its Seat

The money works due to the fact that it is boring successful the champion way. It owns the full large-cap U.S. marketplace weighted by size, truthful NVIDIA accounts for 7.58% of the fund, Apple for 6.66%, and Microsoft for 4.91%. Over 10 years, the ETF has returned 247.11%, and implicit 1 twelvemonth it is up 20.13%. Anyone gathering a portfolio astir a azygous equity ticker has done fine.

The shortfall is structural. Because SPY is weighted by marketplace cap, it ever owns yesterday's winners astatine yesterday's prices. When enactment shifts wrong the index, SPY captures the determination lone arsenic those names summation their share. It cannot thin into what is moving now.

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Where SPMO Wins successful 2026

The momentum money tracks the S&P 500 Momentum Index, which selects astir the apical 100 S&P 500 names, ranked by risk-adjusted terms momentum, and rebalances semiannually. It is the aforesaid beingness of stocks arsenic the halfway S&P 500 fund, filtered to see those with the strongest caller trend. The disbursal ratio is 0.13%, which works retired to astir $13 per $10,000 invested, versus astir $9.45 for the flagship fund.

Those other 4 ground points person bought a batch this year. SPMO is up 26.03% year-to-date done July 13, 2026, compared with SPY's 9.86%. On a $50,000 position, that is astir $13,015 of instrumentality for SPMO versus $4,930 for SPY, earlier the interest quality of astir $18. The interest spread is simply a rounding mistake adjacent to the show spread.