This Vanguard ETF Has Outperformed the Company's S&P 500 Fund for Years. Most Investors Have Never Heard of It.

The Vanguard U.S. Momentum Factor ETF (VFMO), a lesser-known actively managed fund, has outperformed Vanguard's S&P 500 ETF since its 2018 inception with a 26.2% annualized three-year return versus 21.3%. Using a rules-based quantitative model to identify stocks with strong recent performance, the fund offers significant diversification from broad market funds with only 23% overlap and lower concentration risk, though it carries roughly 30% higher volatility due to its 29% small-cap allocation.