XMVM: Impressive Value Characteristics But Unappealing Quality And Performance

Vasily Zyryanov2.22K FollowersFollow5ShareSavePlay(13min)CommentsSummaryInvesco S&P MidCap Value with Momentum ETF is a passively managed ETF mixing value and momentum factors in the mid-cap space.Although XMVM has outperformed IJJ and IJH since the strategy change in 2019, it has trailed IVV, delivering a high downside capture ratio and a deep maximum drawdown.XMVM's portfolio is offering an impressive 8.8% adjusted weighted average earnings yield but quite lackluster quality, which adds to risks in the current environment.Overall, I do not find XMVM's historical risk characteristics appealing enough and I do not see the potential to outperform IVV and IJH going forward. I initiate coverage with a conservative Hold rating. malerapaso/E+ via Getty Images I believe that at this juncture, there are investors who might be considering the Invesco S&P MidCap Value with Momentum ETF (XMVM), a passively managed exchange-traded fund offering exposure to the combination of seeminglyThis article was written byVasily Zyryanov2.22K FollowersFollowVasily Zyryanov is an individual investor and writer.He uses various techniques to find both relatively underpriced equities with strong upside potential and relatively overappreciated companies that have inflated valuation for a reason.In his research, he pays much attention to the energy sector (oil & gas supermajors, mid-cap, and small-cap exploration & production companies, the oilfield services firms), while he also covers a plethora of other industries from mining and chemicals to luxury bellwethers.He firmly believes that apart from simple profit and sales analysis, a meticulous investor must assess Free Cash Flow and Return on Capital to gain deeper insights and avoid sophomoric conclusions.While he favors underappreciated and misunderstood equities, he also acknowledges that some growth stocks do deserve their premium valuation, and its an investor's primary goal to delve deeper and uncover if the market's current opinion is correct or not.Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.