The momentum factor is crushing the competition year to date, based on a set of ETF proxies through Friday’s close (Feb. 14). After a strong run last year, momentum is roaring higher in 2025 in relative and absolute terms.
The iShares MSCI USA Momentum Factor ETF (MTUM) has surged 10.3% this year, more than twice the gain for the broad equity market benchmark via SPDR S&P 500 (SPY).
The next-best factor is also well behind MTUM’s bull run so far in 2025: An ETF tracking the high-beta factor (SPHB) is in a distant second place with a 5.4% rise this year.
Momentum’s strong leadership is all the more striking for a year so far that reflects a rising tide that’s lifted all factor boats. But while everything is posting gains, the laggards are far behind the leaders. The weakest performer so far this year: small-cap value (IJS), which is barely hanging on to a razor-thin advance of just 0.3% year to date.
What’s driving MTUM’s bull run? The fund’s top two holdings are a key part of its success so far this year. MTUM’s top holding – semiconductor firm Broadcom (NASDAQ:AVGO), with a 6.2% portfolio weight, according to Morningstar.com — is up 16% so far in 2025. The second-largest holding is Walmart (NYSE:WMT) with a 5.4% weight and a 15.2% year-to-date gain.
By comparison, the two largest holdings in the market benchmark – SPDR S&P 500 (SPY) – are posting sharply softer results: Apple (NASDAQ:AAPL) is down 2.2% year to date while NVIDIA (NASDAQ:NVDA) is up a modest 3.4%.
The momentum factor, in short, is killing it so far in 2025.
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