The Momentum Factor Still Has Legs. But Stay Selective February 11, 2021 The momentum factor remains compelling, but investors should be selective when embracing it. One way to do so is through the MTUM seeks to track the investment results of the MSCI USA Momentum Index, which consists of stocks exhibiting relatively higher momentum characteristics than the traditional market capitalization-weighted parent index, the MSCI USA Index, which includes U.S. large- and mid-capitalization stocks. Momentum tends to be negatively correlated to factors like size and value since momentum identifies securities that are trending upwards. These stocks tend to reflect successful companies with positive trends that become bigger and bigger. Consequently, investors can also enjoy the diversification benefits of adding momentum strategies to small cap and value-heavy portfolios.