Meet the Magnificent Momentum-Driven ETF Obliterating the S&P 500 in 2026
Key PointsThe Vanguard U.S. Momentum Factor ETF invests in stocks showing strong uptrends.
A new exchange-traded fund (ETF) is outperforming the broader market in 2026, according to recent data. The Vanguard U.S. Momentum Factor ETF, denoted by the ticker VFMO, exclusively invests in stocks that are currently trending upwards. The fund utilizes sophisticated mathematical models to pinpoint these high-performing securities, placing greater weight on those exhibiting consistent returns over the past year of trading activity.
As of the most recent market close on Thursday, September 10, VFMO has generated a return of 18.5% for 2026. This impressive performance significantly outpaces the S&P 500 index, which has only managed a modest gain of 10.9% during the same period. The fact that VFMO has managed to exceed market averages in every year since its inception in 2018 further underscores its exceptional track record.
It is worth noting that successful fund managers like Peter Lynch and Paul Tudor Jones have long advocated for a hands-off approach when it comes to investing. Lynch, for instance, emphasizes the importance of letting winning investments continue to grow while swiftly cutting losses. He likens the opposite strategy to "cutting the flowers and watering the weeds" in one's portfolio, arguing that such a tactic would be illogical and counterproductive.
VFMO's strategy aligns closely with this philosophy, as it concentrates its resources on stocks that have already demonstrated robust performance, thereby maximizing potential gains while minimizing risk.
Written by urgent.news from Motley Fool's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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