SPMO's Whole Crash Record Is 8 Years Long. Here Is What Momentum Actually Does in a Bear.

There is a version of the same post on r/ETFs every few weeks, and it is loud again right now: SPMO is the perfect core holding, it beat the S&P over the last decade AND fell less in the crash, so why would you hold plain VOO. At the same time, half the sub is bracing for a 20-30% drawdown. Those two ideas deserve to be put in the same room, because the case for SPMO rests entirely on a crash it has barely met.

Let's start by giving the bulls everything the data actually supports, because it is real.

The visible record is genuinely good

SPMO (Invesco S&P 500 Momentum) launched in October 2015. From then through today:

That is not a small edge. Nearly 5 points of CAGR a year, a shallower worst-case, and it lost less than the index in both of the downturns it has lived through. If your entire sample is 2015 to 2026, SPMO looks like a free lunch: more return, less pain. The people posting the charts are not making the numbers up.

The problem is which crashes those are

SPMO's whole life contains exactly two selloffs. The COVID crash was over in five weeks, a sharp V that recovered before momentum had to make a single hard decision. And 2022 was a rotation year that happened to punish the expensive growth names momentum was already underweight, so momentum's relative win there was partly luck of what was falling. It has never seen a slow, grinding, multi-year bear. And it has never seen the specific thing that has historically hurt momentum most.

A century of momentum tells the other half

SPMO is a rules engine: hold the S&P names with the strongest recent price trend. That exact rule has a long history, because Ken French has published the returns of a top-decile momentum portfolio (the "winners") back to 1927. Here is what the winners did in the bears SPMO was not alive for:

Momentum did not cushion those. It fell about as hard as the market, and in the Depression it fell harder, because a momentum portfolio is always fully invested in equities. It rotates within stocks, from weaker names to stronger ones, but it never rotates to cash or bonds. "Holds up better because it owns what is falling least" is still 100% long stocks the entire way down.

Then there is the momentum crash proper. At a violent market bottom, the trash rallies hardest: the destroyed names double off the floor while yesterday's winners keep sinking. A momentum book is holding exactly the wrong side of that turn. The academic name for it is a momentum crash, and 2009 was a textbook case; a long-only fund like SPMO experiences it as brutal underperformance during the sharpest part of the recovery, right when you most want to be participating.

So what is SPMO, honestly

SPMO is a good return tilt with a real, persistent factor behind it. What it is not, on any evidence its own history can provide, is a defensive core. The "fell less in the crash" claim is doing enormous work while resting on an eight-year sample that structurally cannot contain the risk. The moment SPMO meets a slow bear or a sharp reversal, the thing that has protected momentum investors for a century is the one thing SPMO cannot do: get out of equities.

That is the actual gap, and it is also the fix. Momentum tells you what to hold. A trend or absolute-momentum rule tells you whether to hold equities at all. Bolt the second onto the first and you keep the return tilt while adding the de-risking SPMO lacks, which is the whole idea behind tactical momentum strategies like GEM. We backtested the momentum factor itself all the way to 1928 in this post, and the pattern is consistent across a century: the factor works, and it still needs a rule for the bear.

Hold SPMO if you want the tilt. Just size it as an aggressive equity sleeve, not as the thing that saves you, and know that the record everyone is quoting is the eight good years, not the century.