This is a passive ETF that invests in stocks with high value and momentum scores, drawn from the S&P MidCap 400 Index. It picks mid-sized companies that are undervalued and also show strong price momentum, and gives them greater weight.

It suits investors who want to combine the value and momentum factors in mid-cap investing.

It is managed by Invesco using a passive (index-tracking) approach.

The fund selects stocks from the S&P MidCap 400 Index that score high on both value and momentum, and weights them accordingly. By evaluating undervaluation and price momentum together, it follows a rules-based strategy that pursues a risk and return profile different from single-factor products that reflect only value or only momentum.

• Combines value and momentum as dual factors
• Rules-based selection centered on mid-cap stocks

Assets under management (AUM) stand at $521.9M, and the expense ratio is 0.37% per year.

The main point of comparison is its selection method, which combines value and momentum, versus single-factor mid-cap ETFs or plain mid-cap indexes.

US mid-cap stocks react sensitively to the economic cycle, interest rates and market risk appetite. A combined value and momentum strategy can show a large performance gap versus the market average when both factors work together. Mid-caps tend to be somewhat more volatile than large-caps.

Fund flows into factor-combination products diverge depending on market risk appetite and style rotation, and money sometimes moves into related product groups when interest in value and momentum rises. It is also worth watching how performance changes with the economic cycle and style rotation.

The combination of value and momentum is its strength, while underperformance during style rotations, mid-cap volatility and turnover are points to consider.

For simpler mid-cap exposure, direct alternatives include IJH and MDY, and for a focus on mid-cap value stocks, products such as IWS are also worth comparing. The two products shown in the table, XSVM and VAMO, differ in market-cap range and management approach, with small-cap value and momentum and a value and momentum strategy respectively. This ETF's distinguishing criterion is its dual-factor selection that combines value and momentum in mid-cap stocks.

Here are the points to review before investing in XMVM. The dual-factor combination is attractive, but style rotation, mid-cap volatility and turnover need to be checked in advance. It is also a good idea to compare it with plain mid-cap and mid-cap value products.

Relative underperformance when the value or momentum factor is weak, along with mid-cap volatility, are the main variables for long-term results, and a rules-based strategy can diverge from the market average depending on the period. Given the nature of mid-caps, losses can be large during market crashes.

It is a suitable candidate for investors who want to combine value and momentum in mid-cap investing. If plain mid-cap exposure is the priority, products such as IJH and MDY fit better, while investors who want dual-factor selection of value and momentum should compare this product alongside them before choosing.