Vanguard US Momentum Factor ETF Performance and Investment Analysis

The Vanguard US Momentum Factor ETF is a great option for investors looking to tap into the power of momentum investing. It tracks the CRSP US Momentum Index, which focuses on stocks with high price momentum.

This ETF has a low expense ratio of 0.25%, making it a cost-effective choice for investors.

The fund's top holdings include Amazon, Microsoft, and Alphabet, which are all well-established companies with strong momentum.

Investors can expect a high level of liquidity, with an average daily trading volume of over 1 million shares.

Readers also liked: Ishares Msci Usa Momentum Factor Etf

Vanguard US Momentum Factor ETF has a portfolio turnover rate of 73%, which is relatively low compared to the average portfolio turnover of 95% for the Mid-Cap Blend category.

This low turnover rate can help keep expenses down and potentially lead to higher aftertax returns.

High portfolio turnover can translate to higher expenses and lower aftertax returns.

In December 2024, Vanguard US Momentum Factor ETF returned -7.6%, earning it a grade of F in the Mid-Cap Blend category, where the average return was -6.8%.

Take a look at this: How to Find Stock Growth Rate

The letter grades of A, B, C, D, and F are based upon relative rankings within the investment category.

The ETF's expense ratio is 0.15%, which includes a management fee of 0.15% and other expenses of 0.00%.

Here is a breakdown of the fees:

The Vanguard US Momentum Factor ETF (VFMO) offers strong diversification, which is a major advantage for investors. This is due in part to its modified equal-weighted portfolio.

This diversification strategy helps to reduce risk and increase potential returns. By allocating equal weight to each holding, VFMO spreads its investments across a range of industries and sectors.

VFMO's top holdings are mostly in the technology sector, which is a key driver of its momentum. This focus on momentum investing sets VFMO apart from other ETFs.

With a diversified portfolio like VFMO's, you can benefit from the growth potential of various industries and sectors. This makes it an attractive option for investors looking to add some momentum to their portfolio.

VFMO's solid returns are a testament to its effective diversification strategy. By investing in a range of momentum-driven stocks, VFMO has delivered impressive results.

Broaden your view: What Is a Momentum Trader

VFMO is an actively managed ETF that targets U.S. large and mid-cap stocks with strong recent price performance.

The fund was launched on February 13, 2018, and is issued by Vanguard. This means you can expect a relatively new fund with a track record that's still developing.

VFMO invests in stocks with strong recent performance as determined by the advisor, not based on a momentum index. This approach sets it apart from other momentum-focused funds.

The fund has a portfolio that is inferior to its benchmark and the S&P 500, according to a deep dive into its holdings. This suggests that VFMO may not be the best choice for investors looking for a momentum-focused ETF that consistently outperforms the market.

Check this out: Which of the following Is Not a Factor of Production?

VFMO and MTUM are two momentum ETFs that have gained attention in the market. The Vanguard U.S. Momentum Factor ETF (VFMO) invests in stocks with strong recent performance as determined by the advisor, not based on a momentum index.

MTUM, on the other hand, offers index-based access to a specific factor that has historically driven a significant part of companies' risk and return. This is a key differentiator between the two funds.

The Vanguard U.S. Momentum Factor ETF (VFMO) has a unique investment approach, focusing on stocks with strong recent performance as determined by its advisor.

VFMO was launched on February 13, 2018, and is issued by Vanguard, a well-established and reputable financial institution.

VFMO invests in large-, mid-, and small-cap US stocks with high momentum, making it an actively managed fund.

The iShares MSCI USA Momentum Factor ETF (MTUM) is a well-known momentum ETF, but its investment approach is different from VFMO's.

A deep dive into VFMO's holdings reveals a portfolio that is inferior to its benchmark and the S&P 500, which is a notable difference from MTUM's performance.

Vanguard Should Retire the U.S. Momentum Factor ETF because it's a redundant product that serves the same purpose as the existing U.S. Momentum ETF, MTUM.

The U.S. Momentum Factor ETF, VFMO, has a similar investment strategy to MTUM, which is to invest in stocks with high momentum.

This redundancy makes it difficult for investors to decide between the two ETFs, leading to confusion and potential poor investment decisions.

The fees for VFMO and MTUM are also comparable, with VFMO charging 0.06% and MTUM charging 0.10%.

MTUM offers exposure to large- and mid-cap U.S. stocks with relatively higher price momentum.

This approach has historically driven a significant part of companies' risk and return, as demonstrated by the research of N. Jegadeesh and S. Titman in their 1993 Journal of Finance study.

By investing in MTUM, you can gain index-based access to this specific factor.

This can be a useful tool to help manage exposure and risk within a stock allocation.

Here's an interesting read: Leveraged Etf Risk

Investing in the Vanguard U.S. Momentum Factor ETF (VFMO) requires a strategic approach, especially near all-time highs in the market.

VFMO is an actively managed ETF that targets U.S. large and mid-cap stocks with strong recent price performance. It's designed to capture momentum, which can be a powerful force in bull markets.

Investors should be aware that VFMO is underweight tech compared to the broader market, which can provide a diversification benefit.

The Vanguard U.S. Momentum Factor ETF (VFMO) provides investors with exposure to stocks with strong historical returns.

Momentum can deliver strong returns during bull markets, but it's essential to remember that VFMO is only one tool in the toolbox.

VFMO is underweight tech compared to the broader market, which can be beneficial in times of market volatility.

Single factor strategies like VFMO can be effective, but they should be used in conjunction with other investment approaches to create a well-rounded portfolio.

VFMO targets U.S. large and mid-cap stocks with strong recent price performance, which can be a valuable asset in a portfolio.

Here's an interesting read: Long Term Equity Market Returns

Investing is a way to potentially grow your wealth over time by putting your money into assets like stocks, bonds, or real estate. It's a smart way to build a financial safety net and achieve long-term goals.

There are different investment strategies to consider, such as building an iBonds ladder, which can help you manage risk and optimize returns.

To get started, it's essential to understand the basics of investing. One key concept is factor investing, which involves using 5 key factors to enhance investment returns or reduce risk in your portfolio: value, quality, momentum, size, and minimum volatility.

These factors can help you make informed investment decisions and create a diversified portfolio. By considering these factors, you can potentially reduce risk and increase returns over time.

Here are the 5 key factors to consider in factor investing: