Invesco S&P SmallCap Momentum ETF

Invesco S&P SmallCap Momentum ETF (XSMO) is an index fund that holds about 110 US small-company stocks. It picks them from the S&P SmallCap 600 based on how strongly their prices rose over roughly the past year. Among nine similar small-cap funds, it ranked first on three-year returns as of October 27, 2026. It also trades heavily and charges 0.35% a year, against a 0.14% average for those funds.

• Over the year to Oct 27, 2026, XSMO returned +9.9%, 9th of 9 among similar funds.
• Its 5-year annualized return was +9.0%.
• Its worst full calendar year was 2022 (-15.5%); its best was 2023 (+21.6%).
• The deepest fall in its price history was 29.6% (Nov 9, 2021 to Sep 26, 2022), recovered by Mar 21, 2024.

As of Jul 31, 2026, the fund held 107 securities; the ten largest made up 24.1% of assets. It also reported 16.36% in a money-market fund, most likely cash collateral from lending out shares rather than uninvested money.

• Over the three months to Jul 31, 2026, investors added a net $283.4M (creations minus redemptions, per the N-PORT report).
• Monthly total returns reported for that quarter: +1.57%, +6.44%, -7.36%.

XSMO tracks the S&P SmallCap 600 Momentum Index, which S&P Dow Jones Indices builds and maintains. The index starts with the S&P SmallCap 600, a widely followed index of US small companies. S&P measures each stock's price change over the last 12 months, leaving out the most recent month, and then adjusts it for how volatile the stock was. The result is its "momentum score." About 120 of the highest-scoring stocks make the cut. As of June 30, 2026, the index held 109 companies with market values from $661.6 million to $13.5 billion.

Each stock's weight comes from its market value multiplied by its momentum score, with limits on single stocks and sectors. As of July 31, 2026, the largest holdings were Viasat (4.6% of assets), ESCO Technologies (3.0%), Protagonist Therapeutics (2.6%), Indivior Pharmaceuticals (2.2%) and Mercury Systems (2.2%). The top 10 made up 24.1%.

The fund uses full replication, which means it buys every stock in the index at the index's weights. It uses no leverage, options or derivatives. Yesterday's winners keep changing, so the portfolio does too. Turnover was 121%, which means the fund bought and sold more than its whole portfolio's worth in a year. Those trading costs are not included in the expense ratio.

• XSMO charges 0.35% a year, versus an average of 0.14% for the similar funds below (8th of 9, cheapest first).
• Of that, 0.29% is the management fee; the rest covers other fund expenses.
• Using the prospectus's standard example, $10,000 invested would cost about $36 in the first year and $444 over 10 years (assuming a 5% annual return).

It is a concentrated, high-turnover tilt toward small stocks with strong recent price gains, and it has seen steep drops and slow recoveries, so it fits better as a side position than as a foundation.

XSMO could add a tilt toward small US companies whose prices have been rising. The ride has been rough at times. Its deepest drop was 29.6%, from November 9, 2021 to September 26, 2022. It did not regain its old high until March 21, 2024, about 18 months after the low. In the 2022 bear market it fell 25.3%, and 2022 was its worst calendar year, at -15.5%. Its price history starts in June 2020, so the 2008 crisis is not covered. The prospectus does show a 25.15% loss in the first quarter of 2020. Anyone who has to sell during a slump like these could lock in losses.

Income is small: the yield was 0.64% as of October 27, 2026, paid quarterly. Under the SEC's standard example, costs come to $36 in the first year on $10,000. Past results don't predict the future, and a plan should look at the whole portfolio, not one fund.

Matched by holdings overlap from the latest N-PORT reports.