Momentum holds the lead despite October rotation
SPY•The iShares Momentum ETF is up 19.7% in 2026, ahead of the S&P 500 ETF’s 12.9% gain, but has fallen nearly 6% in October as dividend and low-volatility stocks rise roughly 8% and 7%.
1. Momentum leads year to date
The iShares Momentum ETF has gained 19.7% in 2026, compared with 12.9% for the SPDR S&P 500 ETF Trust. Small caps are up 13.8%, growth stocks 13.0%, and value stocks 12.9%; low-volatility stocks lag with a 5.6% gain.
2. October rotation
Momentum has fallen nearly 6% this month after the CBOE Volatility Index recently touched four-month highs. Dividend stocks have gained roughly 8% and low-volatility names roughly 7%; the dividend ETF is on track for its strongest month since June 2023, while the low-volatility ETF is pacing for its best monthly advance since December 2021.
3. Market factors in focus
The rotation's staying power remains uncertain as investors navigate geopolitical tensions, elevated oil prices, inflation concerns, Treasury yield volatility, AI spending, debt worries and the approaching US midterm elections. Momentum remains nearly 7 percentage points ahead of the broader market year to date.
