MTUM

Interested in iShares MSCI USA Momentum Factor ETF? Here are five stocks we like better. Broad earnings success for Q1 2026 may encourage investors to seek out ways to tap into momentum across sectors. ETFs like MTUM and QMOM provide unique means of accessing momentum stocks in order to capitalize on growth while controlling risk. CAPE takes a different approach: by seeking out undervalued stocks, it may target names that are poised for big growth in the future. Despite numerous reasons why investors might expect otherwise, 2026 appears to be off to an excellent start across many parts of the market. As evidenced by strong earnings growth often topping analyst expectations, hearty revenue growth, and continued elevation in profit margins, a market buoyed by AI investment has thrived. While not all portions of the market have flourished, the boom goes beyond just the information technology sector—financials stocks have also done quite well overall, for instance. For investors, there may be motivation to try to capitalize on broad strength with diversified exchange-traded funds (ETFs). Ideally, these investments might help capture some of the market's overall growth while simultaneously shielding investors from risks specific to any individual stock. One fund for overall momentum, one based on price-to-earnings (P/E) ratio, and one fund focused on momentum quality and consistency may be a place to start. → Cracker Barrel Surges 23% as Earnings Beat Signals Turnaround Progress The iShares MSCI USA Momentum Factor ETF (BATS: MTUM) is one of the low-cost factor-based ETFs that, as a group, have gained significant popularity in recent years. This fund targets a group of large-cap U.S. equities that have a recent history of share price momentum. Its underlying index helps to ensure some diversification across sectors, and weighting within each sector keeps the overall portfolio from becoming too narrowly focused. → The AI Boom Has a Hidden Winner—And It's Not NVIDIA The result is a fund with about half of its portfolio dedicated to technology stocks, with none of its nearly 130 positions accounting for more than 6.5% of invested assets. The fund is robust, with close to $26 billion in assets under management and a healthy one-month average trading volume of around 1.5 million. In terms of performance, the momentum play continues to be strong: MTUM has returned around 25% year-to-date (YTD) and 35% in the last 12 months. A modest dividend yield of 0.7% might help to sweeten the deal further. Overall, MTUM is quite a strong offering for a relatively low fee of 0.15% per year. → Casey’s Is Looking Like a Hot Buy as Growth, Buybacks, and Guidance Align Economist Robert Shiller's CAPE ratio remains a highly popular valuation metric, and the Shiller CAPE U.S. Equities ETF (NYSEARCA: CAPE) translates this approach into a diversified fund. CAPE seeks to focus on large-cap U.S. equities from the four cheapest sectors as determined by the CAPE ratio, with a secondary strategy involving momentum in order to avoid the impact of possible value traps. As of April 30, 2026, CAPE held information technology stocks, real estate firms, health care names, and consumer discretionary companies. However, it is rebalanced monthly to ensure timeliness based on market trends. The strategy is unique but has had mixed results recently: CAPE is trading roughly flat YTD. This does go to show that, just because a sector is potentially undervalued, it does not guarantee that stocks within that sector will immediately generate returns. For investors, CAPE may appeal most as a buy-and-hold ETF. Partially, this is due to its relatively modest asset base of just over a quarter of a billion dollars and its similarly small trading volume. At the same time, the fund's expense ratio is fairly high at 0.65%, which is offset by a 1.3% dividend yield. The Alpha Architect U.S. Quantitative Momentum ETF (NASDAQ: QMOM) is another momentum-based fund. In this case, QMOM factors in one-year returns and, more specifically, a history of small, continuous daily upward price movements (rather than a smaller number of spikes, for example). This fund also focuses on smaller stocks, expecting that these firms will receive less analyst coverage and may therefore offer more mispricing opportunities to capitalize on. QMOM is an actively managed fund, but its expense ratio of 0.28% would not necessarily give that fact away. All told, the ETF holds just over 50 different U.S. equity positions, all of which are roughly equally weighted (no single name represents more than 2.5% of the portfolio). Its largest holdings include Dell Technologies Inc. (NYSE: DELL) and TD SYNNEX Corp. (NYSE: SNX), although the fund does not completely lean on tech names. QMOM's approach has generally been successful: the fund has returned close to 17% YTD and offers an appealing dividend yield of about 1.2%. While not massively popular, its asset base is approaching half a billion dollars. This fund may therefore appeal to investors seeking a momentum play slightly off the beaten path—and one that may be uniquely responsive to strong, sustained earnings performance among companies. The article "Build On a Strong Earnings Season With These 3 ETFs" was originally published by MarketBeat. View MarketBeat's top stocks for June 2026.

A sudden tumble in the high-flying factor names could be paving the way for a reversal, say Goldman Sachs traders, putting the spotlight on ETFs tied to the factor ahead of NVIDIA Corp.’s (NASDAQ:NVDA) closely followed earnings next week. Nvidia's quarterly results could decide the fate of momentum stocks and the ETFs that track them, after a two-week slide put the high-flying trade under pressure. Nvidia is down more than 4% in the past week. Track its prices live, here. Goldman’s High Beta Momentum basket, which bundles together the latest winners in the market and shorts losers, fell 13% from Aug 6 to Aug 19, its fourth drop of over 10% this year, as reported by Bloomberg. Historically, these sharp declines have tended to reverse rapidly from such a point. Goldman Sachs pointed out that in previous instances when the basket declined 10% or more in five days, it recovered during the next week, 80% of the time, with median returns of 4.5% during the next week and over 11% over the subsequent month. Momentum-based ETFs such as the iShares MSCI USA Momentum Factor ETF (BATS:MTUM) and Invesco Dorsey Wright Momentum ETF (NASDAQ:PDP) offer investors direct exposure to the same high-octane growth stocks that dominate Goldman’s basket, the likes of Nvidia, Advanced Micro Devices Inc (NASDAQ:AMD), and Palantir Technologies Inc (NASDAQ:PLTR). That makes the funds especially sensitive to whether Nvidia’s earnings next week can revive enthusiasm in AI-related equities or deepen the selloff. ETFs that follow the momentum factor have also experienced uneven returns in 2025, with several abrupt swings related to the AI trade. The latest rout also questions whether these vehicles can be used as tactical trades or not long-term positions. Losses in AI leaders such as Palantir, AMD, Super Micro Computer Inc (NASDAQ:SMCI), and even Nvidia, pulled the basket down. These formerly crowded trades now face profit-taking, high valuations, and nervousness about China’s competitive squeeze. Although Goldman’s traders point out that momentum has previously rebounded following steep drops, some warn that the factor has been erratic throughout the year. Bloomberg Intelligence’s Christopher Cain said that high-momentum stocks have some of the most costly valuations relative to low momentum in history. The last catalyst will depend on Nvidia’s earnings next week. As the heaviest weight in the S&P 500 and Nasdaq 100, the chipmaker’s report could make or break whether momentum ETFs produce another record rebound — or this is merely the beginning of a more significant correction. Read Next: TJX Is Winning – But Your Retail ETF Might Be Missing The Move Photo: Chung-Hao-Lee via Shutterstock UNLOCKED: 5 NEW TRADES EVERY WEEK. Click now to get top trade ideas daily, plus unlimited access to cutting-edge tools and strategies to gain an edge in the markets. Get the latest stock analysis from Benzinga? This article Nvidia's Earnings Could Make Or Break Momentum ETFs originally appeared on Benzinga.com © 2025 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.