ETFs for Long-Term Success: A Look at History

When it comes to investing in exchange-traded funds (ETFs) for the long term, history can be a valuable guide. While past performance is no guarantee of future results, ETFs with a proven track record of success are certainly worth considering. One such ETF that stands out for its market-beating performance over the past decade is the Invesco S&P 500 Momentum ETF (NYSEMKT: SPMO).

Over the past three- and five-year periods, SPMO has outperformed the Nasdaq-100 and S&P 500, and is essentially equal to the Nasdaq and the fund that tracks it, the Invesco QQQ (NASDAQ: QQQ), over the past 10 years.

Why SPMO Stands Out

So, what sets SPMO apart from other ETFs? One key factor is its focus on momentum. By investing in the 100 or so large-cap stocks with the most price momentum over the previous 12 months (excluding the most recent month), SPMO is able to outperform broad indexes like the S&P 500. This is because the fund rebalances twice a year, weeding out laggards and volatile stocks that may drag down performance.

With many large-cap stocks currently overvalued, returns for broad indexes could be choppy over the next several years. However, an ETF like SPMO that focuses on momentum should be able to outperform as the market sorts out the winners and losers.

What to Watch Next

While SPMO has been a stellar performer over the past decade, it's essential to keep in mind that past performance is no guarantee of future results. However, the fund's focus on momentum and its ability to outperform broad indexes make it an attractive option for long-term investors.

As the market continues to evolve, it will be interesting to see how SPMO performs in the coming years. Will its momentum-focused strategy continue to pay off, or will the fund's performance slow down as the market becomes more volatile?

Other Options to Consider

While SPMO is an attractive option for long-term investors, it's essential to consider other ETFs that may also be worth investing in. The Motley Fool's Stock Advisor analyst team has identified 10 stocks that they believe have the potential to produce monster returns in the coming years.

These stocks include companies like Netflix and Nvidia, which have both been successful in the past and have the potential to continue performing well in the future. While SPMO may be a good option for investors looking for a momentum-focused ETF, it's essential to do your own research and consider other options before making a decision.

Conclusion

When it comes to investing in ETFs for the long term, history can be a valuable guide. The Invesco S&P 500 Momentum ETF (NYSEMKT: SPMO) is one such ETF that stands out for its market-beating performance over the past decade. With its focus on momentum and its ability to outperform broad indexes, SPMO is an attractive option for long-term investors.

However, it's essential to keep in mind that past performance is no guarantee of future results. As the market continues to evolve, it will be interesting to see how SPMO performs in the coming years. By doing your own research and considering other options, you can make an informed decision about whether SPMO is the right ETF for you.