The Comeback of Momentum ETFs: Could Momentum (MMT) Be the Next Major Opportunity?

In 2025, the momentum ETF sector has undergone significant changes, with funds showing divergent results and investors reevaluating their strategies. For example, and brought in $5.4 billion in net new investments, while the broader momentum approach—represented by the Momentum ETF (MMT)—has encountered obstacles. , which was a standout during the AI-fueled surge in 2024, has faltered as technology giants like Nvidia (NVDA) and Tesla (TSLA) have lagged, . This split prompts an important question: Can MMT adjust to the changing market landscape and evolving retail investor habits to regain its former prominence?

Market Structure Shifts: The Rise of Diversified, Low-Fee Strategies

Throughout 2025,

and defensive equities, influenced by global economic uncertainty and a reassessment of speculative growth investments. This movement has been reinforced by and tax-efficient savings vehicles in Europe and Asia, which emphasize broad, cost-effective portfolios. As these platforms gain traction among retail investors, capital has flowed away from concentrated, tech-centric strategies like MMT and toward more comprehensive market exposure. SPMO’s achievements— , which outpaced the S&P 500 by 30% over the year ending June 2025—demonstrate the appeal of diversified momentum approaches in a climate of heightened risk aversion.

Retail Investor Behavior: From Speculation to Systematic Allocation

Retail investors are also changing course,

strategies that generate income through options and automated investing tools. This trend signals a broader skepticism toward expensive tech stocks and a preference for systematic, rules-based investing. Although MMT’s heavy focus on AI-related stocks once matched retail enthusiasm for innovation, its recent losses have highlighted the dangers of relying too much on a single sector. In contrast, this opportunity by delivering customized, low-fee portfolios that balance growth with risk control.

The Partnership Angle: A Strategic Pivot for MMT?

Although there has been no official announcement of a 2025 partnership between MMT and a leading robo-advisor, the fund’s recent difficulties highlight the potential value of such alliances. Institutional investors, on the other hand, have renewed their interest in MMT, as shown by

in the fourth quarter of 2024. This indicates that while individual investors may be moving on, institutions still see promise in MMT’s approach—provided it evolves. could give MMT the platform it needs to transform its momentum strategy into a more diversified, competitively priced offering that appeals to today’s retail investors.

The Road Ahead: Can MMT Reclaim Its Momentum?

MMT’s path to recovery depends on how well it can respond to the ongoing changes in the ETF market. While SPMO’s strong performance proves that momentum investing still has merit,

and recent setbacks present real challenges. The surge of retail money into crypto ETFs—such as and funds— for alternative, fast-growing assets, an area where MMT currently has no presence. For MMT to succeed, it must either broaden its momentum strategy or form a partnership with a robo-advisor to improve accessibility and reduce costs.

Conclusion

Momentum ETFs are far from irrelevant, but their future will be shaped by how well they align with the changing needs of both retail and institutional investors. MMT’s impressive run during the 2024 AI boom was followed by a difficult 2025, exposing the risks of concentrated, high-priced bets. The lack of a clear partnership with a robo-advisor raises doubts about its adaptability, yet the broader momentum ETF segment—

—remains strong. For MMT to become a top choice again, it must either reinvent its approach or forge a strategic partnership that bridges the gap between its current model and the demands of a post-quantitative easing world. Until then, investors may prefer the relative safety of more diversified momentum options.