Momentum ETFs are exchange-traded funds that buy stocks, or other assets, that have risen the most over a recent window on the theory that winners keep winning. They package the momentum factor into a single tradeable fund.
What is a momentum ETF?
A momentum ETF ranks a universe of stocks by recent performance and holds the strongest. Most use a 6- to 12-month lookback, often skipping the most recent month to avoid short-term reversal. The fund then rebalances on a schedule, selling the names that lost strength and buying the new leaders. This is a close cousin of trend following ETFs: momentum ranks assets against each other, while trend following applies an absolute filter to each one.
High momentum ETF list
| Fund | Ticker | Expense ratio | Universe |
|---|---|---|---|
| iShares MSCI USA Momentum Factor | MTUM | 0.15% | US large and mid cap |
| Invesco S&P 500 Momentum | SPMO | 0.13% | S&P 500 |
| Vanguard US Momentum Factor | VFMO | 0.13% | Broad US market |
| Alpha Architect US Quantitative Momentum | QMOM | 0.49% | Concentrated US |
| iShares MSCI Intl Momentum Factor | IMTM | 0.30% | Developed ex-US |
Expense ratios as of August 2026. Verify current fees before investing.
How momentum is measured
The standard measure is total return over the trailing 12 months, excluding the most recent month (often written as 12-1 momentum). The fund sorts everything by that score and holds the top slice. Because it rebalances regularly, a momentum ETF trades more than an index fund, which raises costs and tax drag.
Momentum versus trend following
The two are easy to confuse. Momentum is relative: it always holds something, and just rotates into the strongest names. Trend following is absolute: it holds an asset only if that asset is above its own trend line, and otherwise sits in cash or bonds. Many systems combine them: use momentum to pick what to hold, and a trend filter to decide whether to hold anything at all.
Are momentum ETFs any good?
Momentum has been one of the most persistent factors in markets, but persistence is not a promise. Momentum ETFs can lag the market for years, turn over frequently, and fall sharply in fast reversals. They make most sense as a modest slice of a portfolio, held for the long term. Before committing, see how trend and momentum compare to buy and hold.
FAQ
What are the best momentum ETFs?
The largest and most liquid are MTUM (iShares MSCI USA Momentum) and SPMO (Invesco S&P 500 Momentum). Low-cost alternatives include VFMO (Vanguard) and IMTM (iShares international momentum).
Are momentum ETFs any good?
Momentum has been one of the most persistent factors in markets, but that is no guarantee. Momentum ETFs can lag for long stretches, turn over often, and tend to fall hard in sharp reversals. Treat them as one piece of a portfolio, not a core holding.
What is a momentum ETF?
A momentum ETF is an exchange-traded fund that holds stocks or other assets that have risen the most over a recent window, usually 6 to 12 months, on the theory that winners keep winning.
What is Warren Buffett’s favorite ETF?
Warren Buffett has not endorsed a momentum ETF. His repeated public recommendation is a low-cost S&P 500 index fund, and his estate instructions direct 90% into an S&P 500 index fund. That is a plain index fund, not a momentum strategy.
Disclaimer: Educational content only, not financial advice. Fund fees and details change; verify them on the issuer’s site before investing. Full disclaimer and affiliate disclosure.
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