Core Viewpoint - The Invesco S&P MidCap Momentum ETF (XMMO) is highlighted as a strong investment option due to the recent performance of small- and mid-cap companies, which have started to gain traction in the market [2][3]. Fund Performance - XMMO has shown an increase of approximately 11% through the first 10 months of the year, outperforming traditional index-based mid-cap investments [3]. - Over the last five years, XMMO has returned roughly 16%, compared to the S&P MidCap 400 index's return of 13% [12]. Investment Strategy - The ETF employs a relative strength strategy, focusing on the top 20% of mid-cap stocks based on their momentum over a six-month period [5][4]. - XMMO rebalances semiannually, with the last rebalance occurring at the end of September [4]. Sector Exposure - The portfolio consists of 80 stocks, with a significant overweight in industrials, making up about one-third of the portfolio, while financials account for approximately 10% [6]. - The fund has low exposure to sectors such as healthcare, real estate, energy, and materials, which could impact performance if those sectors lead the market [15][16]. Historical Context - XMMO has consistently ranked at the top of its peer group over the last 10 to 15 years, demonstrating its effectiveness as a momentum-based investment [8]. - Despite some struggles in the past, particularly in 2022, XMMO has generally outperformed its peers during market downturns [14].

Core Insights - Separate Managed Accounts (SMA) are customized investment tools for high-net-worth and institutional clients, allowing investors to directly own each security in their account while benefiting from professional management, combining the advantages of fund-like management with personal asset control [3][6][10] - Compared to Model Portfolios, SMAs offer significant differences in customization, ownership, and tax management, enabling tailored investment strategies based on individual risk preferences and ESG considerations [3][10] - The global SMA market is evolving towards digitalization, deeper ESG customization, and scalability, with opportunities for domestic accounts to adopt similar strategies to enhance personalization and tax efficiency [3][10] Overview of SMA Business - SMA allows investors to have direct ownership of securities, providing transparency and tax efficiency, making it a preferred choice for high-net-worth and institutional investors [6][10] - Various forms of SMA exist, including discretionary, non-discretionary, model-driven, multi-manager, and tax-optimized types, catering to different investor preferences and needs [12][10] International SMA Practices - J.P. Morgan is a leading SMA provider with over $300 billion in assets under management, utilizing a tax-driven index strategy that has significantly outperformed benchmarks [24][3] - Vanguard's SMA strategy focuses on low-cost, direct indexing, enhancing tax efficiency through coordinated rebalancing, with a minimum investment threshold of $10,000 [31][3] - Fidelity employs a tax-smart investing approach, utilizing a proprietary STAR Score system for stock selection and achieving a tax efficiency rate of 85% in 2024 [34][35] Key Features of SMA Providers - J.P. Morgan's SMA includes a comprehensive management structure with dedicated teams for investment management and client service, ensuring tailored solutions and compliance monitoring [16][24] - Vanguard's SMA leverages a direct indexing platform to provide personalized investment solutions, enhancing tax management and cost efficiency [31][32] - Morgan Stanley's SMA platform emphasizes professional management and tax optimization, allowing clients to directly hold assets while benefiting from expert guidance [51][53] Investment Strategies and Performance - J.P. Morgan's Large Cap Growth Strategy SMA achieved a five-year annualized net return of 15.25%, significantly outperforming the Russell 1000 Growth Index [24][3] - Morgan Stanley's ClearBridge Small Cap SMA focuses on undervalued small-cap stocks, employing a probability distribution valuation model to identify long-term growth opportunities [59][60] - Fidelity's cross-account tax loss harvesting technology enhances after-tax returns by 0.5%-1.2%, demonstrating the effectiveness of tax optimization strategies [35][3]

Core Viewpoint - Invesco is an independent investment management firm focused on enhancing the investment experience for individuals [1] Group 1 - Invesco emphasizes the importance of understanding investment objectives, risks, charges, and expenses before making investment decisions [1] - The firm provides educational information but does not offer specific investment recommendations or tax advice [1] - Invesco's opinions are based on current market conditions and may change without notice, indicating a dynamic approach to investment management [1] Group 2 - Invesco Distributors, Inc. serves as the US distributor for Invesco Ltd.'s retail products and collective trust funds [1] - The company operates through various affiliated investment advisers that provide advisory services without selling securities [1] - Invesco Unit Investment Trusts are distributed by Invesco Capital Markets, Inc. and other broker-dealers, highlighting the firm's extensive distribution network [1]

Core Viewpoint - Invesco is an independent investment management firm focused on enhancing the investment experience for individuals [1] Group 1 - Invesco emphasizes the importance of understanding investment objectives, risks, charges, and expenses before investing [1] - The firm provides educational information but does not offer tax advice, highlighting the complexity and variability of federal and state tax laws [1] - Opinions expressed by Invesco's authors are based on current market conditions and may change without notice, indicating a dynamic investment environment [1] Group 2 - Invesco Distributors, Inc. serves as the US distributor for Invesco Ltd.'s retail products and collective trust funds [1] - Invesco Advisers, Inc. and other affiliated investment advisers provide investment advisory services without selling securities [1] - The PowerShares® brand is a registered trademark of Invesco PowerShares Capital Management LLC, indicating a diversified product offering [1]

Core Viewpoint - Invesco is an independent investment management firm focused on enhancing the investment experience for individuals, aiming to help them achieve more in life [1] Group 1: Company Overview - Invesco provides a range of investment advisory services and does not sell securities, operating through various affiliated investment advisers [1] - The firm emphasizes the importance of understanding investment objectives, risks, charges, and expenses before making investment decisions [1] Group 2: Services and Offerings - Invesco offers educational resources and expert investment views through its US Blog, encouraging individuals to stay informed about market conditions [1] - The company distributes its retail products and collective trust funds through Invesco Distributors, Inc., which is the US distributor for Invesco Ltd. [1] Group 3: Regulatory and Compliance Information - Invesco highlights that the tax information provided is general and not exhaustive, advising investors to consult legal or tax professionals for personalized advice [1] - The firm notes that opinions expressed are based on current market conditions and may change without notice, indicating a dynamic investment environment [1]

Invesco is an independent investment management firm dedicated to delivering an investment experience that helps people get more out of life.Be the first to know! Sign up for Invesco US Blog and get expert investment views as they post.Disclosure for all Invesco US articles: Before investing, carefully read the prospectus and/or summary prospectus and carefully consider the investment objectives, risks, charges and expenses. The information provided is for educational purposes only and does not constitute a ...

Core Insights - In 2025, investors are focusing on companies that generate steady cash and return it to shareholders, with shareholder yield becoming a key metric for assessing commitment to investor rewards [2][3][4] Market Environment - Inflation is cooling and interest rates are easing, allowing companies that managed debt effectively during tough years to benefit from lower financing costs [3] - Geopolitical uncertainty and high stock valuations are making investors cautious about pursuing growth aggressively, leading to a preference for reliable cash returns [4] Shareholder Yield Strategy - Research indicates that shareholder-yield strategies outperform traditional high-dividend approaches, as high dividends alone do not ensure disciplined capital management [5] - Combining dividends with share buybacks and debt reduction provides a clearer picture of management's commitment to long-term value [6] Investment Opportunities - High-quality shareholder-yield companies offer a blend of consistent returns and volatility cushioning, reflecting management teams focused on long-term performance [7] - Notable companies with strong shareholder yields include: - **CION Investment Corporation (CION)**: Offers a dividend yield of approximately 14.17%, with seven dividend increases in five years and a payout ratio of 81% [8][9][10] - **Invesco (IVZ)**: Provides a dividend yield of 3.57%, with six increases in five years and a payout ratio of 44% [11][12] - **TPG RE Finance Trust (TRTX)**: Offers a dividend yield of around 10.73%, with three increases in five years and a reduction in long-term debt from $3.71 billion in 2021 to $2.83 billion in Q3 2025 [13][14][15] - **W.P. Carey (WPC)**: Provides a dividend yield of 5.38%, with 20 increases in five years despite a negative annualized growth rate of 4.78% [16][17][18]

Market Overview - U.S. stock markets are experiencing a successful year, with major indexes like the Dow, S&P 500, and Nasdaq Composite up 11.2%, 14.8%, and 18.8% respectively [2] - The technology sector, particularly driven by advancements in generative and agentic artificial intelligence (AI), is the primary force behind this rally, although the finance sector has also contributed with the Financial Select Sector SPDR (XLF) up 8.5% year to date [3] Recommended Stocks for 2026 - Five finance stocks are recommended for investment in 2026, having risen over 30% this year: Morgan Stanley (MS), Interactive Brokers Group Inc. (IBKR), Robinhood Markets Inc. (HOOD), Cboe Global Markets Inc. (CBOE), and Invesco Ltd. (IVZ) [4][9] - All five stocks currently hold a Zacks Rank 1 (Strong Buy), indicating potential for further upside [4] Morgan Stanley (MS) - Morgan Stanley's focus on wealth and asset management, along with strategic acquisitions like EquityZen, is expected to enhance revenue growth, with projected increases of 11.7% in total revenues and 12.8% in investment banking fees for 2025 [7] - The firm has an expected revenue growth rate of 3.9% and earnings growth rate of 5.8% for next year, with a recent 3.7% improvement in the Zacks Consensus Estimate for earnings [10] Interactive Brokers Group Inc. (IBKR) - IBKR's revenue growth is supported by proprietary software development, lower compensation expenses, and expansion into emerging markets, with an expected revenue growth rate of 5.5% and earnings growth rate of 8.1% for next year [11][13] - Recent results showed solid revenue growth and lower expenses, indicating a positive outlook for the company [12] Robinhood Markets Inc. (HOOD) - Robinhood operates a financial services platform that allows trading in various assets, including cryptocurrencies, and is expected to benefit from increased retail market participation [14][15] - The company has an expected revenue growth rate of 20.3% and earnings growth rate of 16.2% for next year, with a notable 9.7% improvement in the Zacks Consensus Estimate for earnings [16] Cboe Global Markets Inc. (CBOE) - CBOE anticipates growth in trading volume, which will drive transaction fees and organic growth, with an increased revenue growth target for 2025 set to low double digits to mid-teens [17][18] - The company has an expected revenue growth rate of 2.7% and earnings growth rate of 4.7% for next year, with a 3% improvement in the Zacks Consensus Estimate for earnings [19] Invesco Ltd. (IVZ) - Invesco's financial performance is bolstered by higher assets under management (AUM) and strategic expansion plans, with an expected revenue growth rate of 14.4% and earnings growth rate of 28.6% for next year [20][22] - Recent initiatives, including converting QQQ into an open-end ETF and establishing a joint venture in India, are expected to support revenue growth [21]

Industry Overview - The Zacks Investment Management industry is experiencing growth driven by asset growth, digital transformation, evolving investment vehicles, deeper personalization, and strategic scale [1] - Investment managers, also known as asset managers, manage various financial investments for clients, providing diversification and reducing volatility impacts [3] Key Trends - Continued asset inflows are expected to drive AUM growth, with equity markets performing well and institutional interest increasing [4] - There is a notable rise in inflows into alternative investments, including index funds, private credit funds, and ETFs, alongside the growth of tokenized assets [5] - Mergers and acquisitions (M&As) are being utilized by firms to expand scale, cut costs, and enhance product diversification [6][7] - Elevated expenses due to regulatory compliance and technology upgrades are anticipated to impact profits, although investments in AI and digital platforms may improve margins in the long run [9][10] Industry Performance - The Zacks Investment Management industry ranks 58, placing it in the top 24% of 243 Zacks industries, indicating positive near-term prospects [11][12] - The industry's earnings estimates have been revised upward by 1.9% since April 2025, reflecting growing analyst confidence [13] Comparative Analysis - Over the past two years, the industry has underperformed the S&P 500 Index, gaining 33.9% compared to the S&P 500's 52% increase [15] - The industry's trailing 12-month price-to-tangible book (P/TB) ratio is 3.35X, significantly lower than the S&P 500's 12.55X, indicating a discount compared to the broader market [18][19] Company Highlights - **Ameriprise Financial (AMP)**: As of September 30, 2025, AMP's total AUM was $1.66 trillion, with a CAGR of 5.9% in net revenues over the last five years [27][28]. The company has been restructuring to improve profitability and has a Zacks Rank of 2 (Buy) [31] - **Invesco (IVZ)**: IVZ's AUM reached $2.1 trillion as of September 30, 2025, with a CAGR of 8.5% over the last five years [34]. The company has undertaken initiatives to improve efficiency and has a Zacks Rank of 1 (Strong Buy) [38] - **Affiliated Managers Group (AMG)**: AMG's total AUM was $803.6 billion as of September 30, 2025, with a recent shift towards private markets and liquid alternatives to counter revenue challenges [41][43]. The company also holds a Zacks Rank of 1 [45]

Core Insights - Major asset managers are achieving significant milestones in their ETF businesses amid record inflows, with Capital Group's ETFs reaching $100 billion in assets under management [2] - BlackRock's iShares and Vanguard remain the dominant players in the ETF market, holding $3.9 trillion and $3.7 trillion respectively, while newer entrants like T. Rowe Price are gaining traction [2] Industry Trends - Approximately $1.1 trillion has flowed into US ETFs in 2023 through October, surpassing total inflows for all of 2024, with $378 billion specifically directed towards active ETFs [3] - Total assets in the ETF market have exceeded $13 trillion, indicating robust growth and demand for exchange-traded funds [3] Company Developments - Capital Group has focused on core-style products while other niche issuers have introduced leveraged and thematic funds, with a notable increase in model portfolios for active ETFs [3] - As of March, Capital Group became the third-largest provider of active ETF model portfolios, managing $61 billion, following Wilshire and BlackRock [3] Additional Milestones - Invesco is nearing $800 billion across its 240 US ETFs, while Goldman Sachs has surpassed $50 billion with its 45 US ETFs, and T. Rowe Price has exceeded $20 billion with its 24 ETFs [5]