Should You Forget VOO and Buy This Overlooked ETF Instead?

The Vanguard S&P 500 ETF (NYSEMKT: VOO) is the world's largest exchange-traded fund with more than $1 trillion in assets under management.

It is probably in your portfolio already, and if it's not, you likely own shares of one of its major ETF competitors, the iShares Core S&P 500 ETF (NYSEMKT: IVV) and the State Street SPDR S&P 500 ETF (NYSEMKT: SPY), which are the second- and third-largest ETFs, respectively.

If you don't own VOO or one of its competitors, then you probably should because a fund that tracks the large-cap benchmark should be a core holding in your portfolio.

But I don't know that I'd rush out at the moment to add shares of VOO or one of its competitors. Large-cap stocks are overvalued right now. The 10-year cyclically adjusted price-to-earnings (CAPE) ratio, also known as the Shiller P/E ratio, is near an all-time high at 40.

Image source: Getty Images.

If the market corrects, as it likely will given historical trends, large-cap stocks will probably be hit the hardest, since they are the most overvalued.

If you are looking for an ETF that could provide some momentum, even in a downturn, consider this overlooked fund: the MarketDesk Focused US Momentum ETF (NASDAQ: FMTM).

Offense and defense

As stated in its marketing materials, the MarketDesk Focused US Momentum ETF seeks to combine offense and defense in a portfolio through its unique quantitative strategy.

The all-cap fund is designed to identify 30 to 50 stocks with the highest relative momentum, even during market downturns. It does this by drawing from the universe of stocks with market caps over $1 billion and then applying liquidity and quality screens, which include filters for profitability, operating efficiency, and balance sheet strength.

From that pool, the algorithm looks for stocks with stable, upward share-price momentum over the previous six months. Those stocks are then ranked by the consistency and quality of the price momentum. Ultimately, it results in a portfolio of 30 to 50 of the most stable, consistent growers in any given market, further grounded by its equal-weighted construction. It is reconstituted and rebalanced monthly to maintain stock levels and sustain stable, consistent price momentum.

Up 29% over the past 12 months

Currently, FMTM's three largest holdings are Marathon Petroleum (NYSE: MPC), HF Sinclair (NYSE: DINO), and Paycom Software (NYSE: PAYC).

The ETF has only been around since July 2025, so it has a limited track record. But over the past year, it has returned 29%, and it is up 20% year-to-date.

Data by YCharts.

By comparison, VOO is up 15% over the past 12 months and 12% year-to-date.

But you can get a sense of its ability to outperform in downturns by looking at its performance in the first quarter of 2026. It was up 3% in Q1 while VOO dropped 7% in the quarter. However, this is a small sample size, so you would want to see how it stacks up over a longer period.

This is indeed an overlooked ETF with a limited track record, but there is a lot to like here as a momentum fund to sit alongside VOO in a portfolio.

Dave Kovaleski has positions in Ea Series Trust - MarketDesk Focused U.s. Momentum ETF. The Motley Fool has positions in and recommends Paycom Software and Vanguard S&P 500 ETF. The Motley Fool has a disclosure policy.