This ETF is CRUSHING VOO Should You Switch? (SPMO vs VOO)

AI-generated source summary

The video analyzes the performance of two S&P 500 tracking ETFs: SPMO (S&P 500 Momentum) and VOO (Vanguard S&P 500 ETF). SPMO, which holds approximately 100 of the 500 S&P 500 stocks selected based on the strongest 12-month price momentum, has significantly outperformed VOO. Year-to-date, SPMO returned +28.5% compared to VOO's +11%. Over a 10-year annualized period, SPMO yielded 20.5% while VOO returned 15.5%. This outperformance is attributed to SPMO's strategy of rebalancing twice a year to include stocks with the strongest momentum, leading to a significant reshuffling of its holdings. For instance, NVIDIA was removed despite being up 30% in the past year, while Apple, near the top, was retained. SPMO exhibits higher volatility (~22%) compared to VOO (~15%), with a beta of 1.34, meaning it tends to fall 47% more than VOO in bad markets. Despite this, its long-term growth trajectory has been superior. The analysis highlights the trade-off between SPMO's higher potential returns and higher volatility and risk, especially during market downturns or rapid sector rotations. The P/E ratio for SPMO (34) is higher than VOO (28) as of July 2026 projections, indicating a premium paid for growth stocks. The video questions whether SPMO's long-term outperformance justifies its higher risk and volatility, particularly for investors considering it for a long-term horizon through potential drawdowns.

AI-generated summary based on the source content.