Should You Forget VOO and Buy This Overlooked ETF Instead?
You've probably never heard of this ETF, but it is worth knowing.
The Vanguard S&P 500 ETF (VOO) is the world's largest exchange-traded fund, with over $1 trillion in assets under management. It is a likely core holding in many portfolios, along with competitors like the iShares Core S&P 500 ETF (IVV) and the State Street SPDR S&P 500 ETF (SPY). However, large-cap stocks are currently overvalued, with the 10-year cyclically adjusted price-to-earnings (CAPE) ratio near an all-time high of 40. A downturn may disproportionately impact large-cap stocks, given their overvaluation.
For those seeking an ETF with potential momentum, particularly during market downturns, consider the MarketDesk Focused US Momentum ETF (FMTM). This all-cap fund aims to identify 30 to 50 stocks with the highest relative momentum, even in down markets. It employs a unique quantitative strategy, focusing on liquidity and quality screens, including profitability, operating efficiency, and balance sheet strength.
The algorithm selects stocks with stable upward share-price momentum over the past six months and ranks them by the consistency and quality of the price momentum. FMTM is constructed equally weighted and reconstituted monthly to maintain its momentum focus.
Currently, FMTM's top three holdings are Marathon Petroleum (MPC), HF Sinclair (DINO), and Paycom Software (PAYC). Although the ETF is relatively new, having launched in July 2025, it has already shown strong performance, with a 29% return over the past year and a 20% gain year-to-date. In comparison, VOO has gained 15% over the past 12 months and 12% year-to-date.
Notably, FMTM outperformed VOO by 3% in Q1 2026, while VOO declined by 7%. However, this small sample size should not be relied upon solely for assessing FMTM's long-term performance.
Despite its limited track record, FMTM offers compelling features as a momentum ETF, making it a valuable complement to VOO in a diversified portfolio. As always, consider all available information and consult with a financial advisor before making investment decisions.
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