Invesco S&P MidCap Momentum ETF (XMMO) Covered Calls

The Invesco S&P MidCap Momentum ETF targets mid-sized U.S. companies with strong recent price performance. It tracks the S&P MidCap 400 Momentum Index, selecting stocks with the highest momentum scores over the past year. This strategy seeks to capture the trend effect, providing exposure to growth-oriented companies that are outperforming their peers. The fund is designed for investors looking to capitalize on market trends within the mid-cap equity space.

You can sell covered calls on Invesco S&P MidCap Momentum ETF to lower risk and earn monthly income. Born To Sell's covered call screener gives you customized search capabilities across all possible covered calls but here are a couple of examples for XMMO (prices last updated Tue 4:16 PM ET):

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The Invesco S&P MidCap Momentum ETF (XMMO) is a factor-based investment vehicle designed to provide exposure to the momentum premium within the U.S. mid-cap equity market. The fund tracks the S&P MidCap 400 Momentum Index, which identifies the top 80 stocks from the broader S&P MidCap 400 Index that exhibit the strongest performance trends. Unlike broad market-cap-weighted funds, XMMO focuses on "winners," systematically rebalancing to include companies whose stock prices have shown consistent upward trajectory relative to their peers.

Core Business and Products

The primary product is the ETF itself, which offers a rules-based approach to momentum investing. The underlying index calculates momentum scores by measuring the price return of each security over the previous 12 months, excluding the most recent month to avoid short-term mean reversion. Constituents are then weighted based on the product of their market capitalization and their momentum score. This methodology results in a portfolio that is often heavily tilted toward cyclical sectors like Industrials and Information Technology when those areas are leading the market. The fund rebalances semi-annually, ensuring that it rotates out of fading trends and into new market leaders.

Competitive Landscape

1. SPDR S&P Midcap 400 ETF Trust serves as the broad-market benchmark for the mid-cap space, offering diversified exposure to the same universe from which XMMO selects its high-momentum holdings.
2. Vanguard Mid-Cap Growth ETF competes for investors seeking growth characteristics in the mid-cap segment, though it follows a traditional growth style rather than a pure momentum factor.
3. iShares Russell Mid-Cap Growth ETF is another significant rival that targets the growth-oriented portion of the mid-cap market, often overlapping with the high-momentum names found in XMMO.
4. Invesco DWA Momentum ETF is a sister fund that uses a different momentum methodology based on "relative strength," competing for investors who prefer a technical-analysis-driven approach to factor investing.
5. Alpha Architect U.S. Quantitative Momentum ETF (QMOM) is a concentrated competitor that utilizes a highly quantitative process to target "smooth" momentum, focusing on stocks that have appreciated steadily rather than in volatile bursts.

Strategic Outlook and Innovation

The strategic focus for XMMO is to remain a primary tool for investors looking to exploit the momentum factor across the capitalization spectrum. As of 2026, the fund has gained significant traction due to its historical ability to outperform during sustained bull markets. Invesco continues to position the fund as a "smart beta" building block that can be paired with value or quality factors to create a diversified, multi-factor portfolio. The fund objective is to provide a higher-conviction alternative to traditional mid-cap indexing by focusing on the most resilient price trends in the market.

Innovation in this space is driven by the refinement of factor definitions and the use of data analytics to better understand the drivers of price persistence. While XMMO remains a passive index-tracking fund, the underlying index provider, S&P Dow Jones Indices, periodically reviews its methodology to ensure it captures the momentum factor effectively in changing market environments. By maintaining a low expense ratio relative to actively managed momentum strategies, XMMO aims to provide cost-effective, transparent, and tax-efficient access to one of the most well-documented anomalies in finance.

Want more examples? XMLV Covered Calls | XMTR Covered Calls