Invesco S&P 500 Value with Momentum ETF (SPVM)

The Invesco S&P 500 Value with Momentum ETF — ticker SPVM — is an exchange-traded fund that invests in large American companies but picks them using two rules: the stock must be cheap relative to its earnings or assets, and it must be rising in price. This combination of value and momentum has a long history in academic finance, and SPVM lets a regular investor own a basket built on that logic without having to pick individual stocks.

What it tracks

SPVM follows the S&P 500 Value with Momentum Index, a modified version of the standard S&P 500. Instead of holding all 500 companies equally weighted, the index starts with the S&P 500, then filters and weights the members. It keeps only stocks that rank as both “value” stocks (trading at a lower price relative to earnings or book value) and “momentum” stocks (showing positive price trends over the recent past). The idea is simple: some investors believe that value stocks — firms that have fallen out of favor — often bounce back, and that momentum stocks — those with upward price action — tend to keep moving up. By combining both screens, the index aims to catch firms that are beaten down but showing early signs of recovery.

This is what professionals call a “factor” strategy. Instead of betting on a particular industry or company story, the fund applies a mathematical filter to find stocks matching specific characteristics. Factor investing appeals to investors who believe markets sometimes misprice stocks based on these patterns, creating opportunities.

Who runs it and how much it costs

Invesco, a global investment firm managing hundreds of billions of dollars, sponsors SPVM. The fund carries an expense ratio — the annual management fee — of approximately 0.40%, which is modest. You pay roughly 40 cents per year for every $100 you own, though the actual cost depends on your trading fees and tax situation. For a fund that does active stock selection (even if that selection is rule-based rather than a human stock picker’s judgment), this fee is reasonable.

How it trades and who might use it

SPVM trades on an exchange like a stock, so you can buy and sell it during market hours at prices that shift moment to moment. The fund holds about 350 stocks — fewer than the full 500 because the value and momentum filters eliminate many. Because it is a real basket of 350 companies rather than a bet on a single stock or a narrow corner of the market, it is relatively stable and liquid.

The fund appeals to investors who believe in factor investing — that certain characteristics like value and momentum offer better risk-adjusted returns than just holding the whole market. Some use it to tilt their portfolio toward stocks they think are undervalued but also showing life. Others layer it in alongside a broad S&P 500 index fund as a way to boost exposure to value stocks, which have periodically delivered strong returns when the market rotates away from high-growth tech names.

The catch: factor timing and momentum decay

Factor strategies sound good in theory, but they come with real risks. The first is timing: value stocks deliver strong returns sometimes and terrible ones other times, depending on what the market cares about. When growth stocks are in favor (as they were in the 2010s and parts of the 2020s), a value-tilted fund can lag for years. Momentum works the same way — it exploits short-term price trends, but those trends can reverse sharply. There is no guarantee that the factors SPVM bets on will outperform the broader market.

The second risk is momentum decay. Momentum works best when you hold the winners for a few weeks or months, but a static fund like SPVM holds them longer. By the time SPVM owns a stock, the momentum may already be fading. Academic studies show that momentum fades quickly and is strongest on shorter timescales, which can make a hold-and-rebalance strategy like SPVM’s less powerful than the momentum signal itself.

Third, factor strategies are crowded now. In the 1990s and 2000s, when this research was fresh, few investors paid attention to value and momentum tilts. Today, trillions are poured into factor-based strategies, which can make the returns from these factors harder to come by.

How to research this fund

Read SPVM’s prospectus and fact sheet, which explain the rules the index uses and the fund’s actual holdings. Check the index methodology from S&P Dow Jones Indices to understand exactly how stocks are scored and weighted. Compare SPVM’s returns to the plain S&P 500 Index (tracked by funds like SPY) over various periods — a year, three years, five years, ten years — to see whether the value-and-momentum tilt has added value or lagged. Look at SPVM’s trailing twelve-month yields and tax efficiency to understand the income and tax impacts of owning it.

Most useful is to watch the style of companies SPVM holds and notice when it performs best and worst. Read the SEC filings and any commentary from Invesco on the fund’s recent performance and how it has tracked its index.