XSMO's Momentum Edge: A Better Bet Than VBK's Broad Growth

2025-10-29 11:03:11 ET

Investing in small-caps has been a historically efficient way to boost your risk/reward profile, while it has been more complicated for this category over the last few years, marked by a dominance of large-cap companies. Small-caps have been lagging, and a way to anticipate a reversal can be growth exposure. I previously covered the Invesco S&P SmallCap Momentum ETF ( XSMO ) here with a buy rating, and today I will compare this fund with the Vanguard Small-Cap Growth ETF ( VBK ) to determine which ETF is the best to get exposure to this market. I oppose them, as momentum strategy and growth ones are not strictly comparable, but I do think that you should choose between one of the two in your portfolio, as the momentum strategy results in an inherent growth portfolio that you don’t want to double down with a growth ETF, or vice-versa....

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