Is This the Smartest ETF to Buy and Hold in 2026? Here's What History Suggests.
Key Points
The Invesco S&P 500 Momentum ETF has posted an average annualized return of 37% over the past three years.
It is one ETF to buy now in 2026 and hold for the long term.
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If you are looking for an exchange-traded fund (ETF) to buy and hold for the long term, the best thing to do is look at history.
While we all know that past performance is no guarantee of future results, ETFs that have a long track record of success are worth taking a look at.
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One ETF that jumps out for its market-beating performance over the past decade is the Invesco S&P 500 Momentum ETF (NYSEMKT: SPMO). This ETF has destroyed the Nasdaq-100 and S&P 500 over the past three- and five-year periods, and is essentially equal to the Nasdaq and the fund that tracks it, the Invesco QQQ (NASDAQ: QQQ), over the past 10 years.
Here's why I think it's the ETF to buy now in 2026.
Image source: Getty Images.
SPMO beats the Nasdaq and S&P 500
The Invesco S&P 500 Momentum ETF has averaged an annualized return of 37% over the past three years and about 20% over the past five- and 10-year periods.
QQQ data by YCharts
So, it has clearly been a stellar performer, as the chart above shows. I think SPMO will continue to outperform those benchmarks because of its focus on momentum. With many large-cap stocks mostly overvalued, returns for broad indexes could be choppy over the next several years.
But an ETF like this that focuses on the 100 or so large-caps with the most price momentum over the previous 12 months -- except the most recent month -- rebalanced twice a year, with certain volatility screens, should be able to outperform as the laggards and the most volatile stocks are weeded out.
Should you buy stock in Invesco Exchange-Traded Fund Trust II - Invesco S&P 500 Momentum ETF right now?
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Dave Kovaleski has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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