Momentum stocks and ETFs are outperforming the market due to the momentum effect

From Nasdaq: 2024-12-03 17:34:00

Factor investing focuses on identifying stocks with specific characteristics that have historically led to higher returns. Factor returns can be cyclical, with different factors performing well in different years. Quality and momentum factors have outpaced the market in the past decade. Currently, momentum stocks are leading, with ETFs like SPMO and MTUM gaining significantly.

The momentum effect, where winning stocks outperform losing ones, has been well-documented. Last year, the MTUM ETF underperformed due to missing out on Nvidia’s rise and being tilted towards underperforming sectors. SPMO ETF has top holdings like Amazon and Nvidia, outperforming the S&P 500 and MTUM since its inception.

Investors can access key ETF info through Zacks’ free Fund Newsletter for weekly updates on news, analysis, and top-performing ETFs. Additional stock analysis reports are available for Amazon, Eli Lilly, Nvidia, Meta Platforms, Berkshire Hathaway, SPY, MTUM, SPMO on Zacks.com for more insights and recommendations.



Read more at Nasdaq: Why Momentum Stocks & ETFs Are Crushing the Market