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Vanguard FTSE Canadian High Dividend Yield Index ETF (VDY $60.93)
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Vanguard S&P 500 Index ETF (VFV $168.34)
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Invesco S&P 500 Momentum ETF (SPMO $120.72)
Q: What are your thoughts on the ETF SPMO? Would you see this as a reliable investment for a more growth forward investor during the long run? Would you combine this with a more stable dividend ETF to balance risk? Or would you prefer see someone invest in a Broad market ETF such as VFV. Thanks
5i Research Answer:
We are big fans of the momentum strategy and it has served us very well in our careers. SPMO's five year annualized return is 19.44%. By design it has fairly large positions (top 2 are nearly 10%) so investors have to be comfortable with this. It really depends on timeframe and the investor. If an investor is young, with a higher risk tolerance, we would be fine with it instead of a broad market fund. More conservative types we think should go broad market, of combine it with a dividend or lower-volatilty product.
Authors of this answer, directors, partners and/or officers of 5i Research and/or affiliated companies have a financial or other interest in VFV.