EEMO
Invesco S&P Emerging Markets Momentum ETF
stock NYSE ETF

Index drift from the S&P500 isn't necessarily an issue otherwise etfs that closely follow the S&P500 like TOPT (top 20 S&P500 stocks) would outperform SPMO and FMTM. AVUV's performance for US small cap value has overall matched the S&P500s performance for the past 5 years and is currently outperforming FMTM YTD.
Momentum doesn't work very well with volatility. It's why IDMO outperformed EEMO over the past decade for example.
You are right more holdings would smooth the price movement but not necessarily about lowering the ceiling. There are many more than just 30 stocks with strong positive momentum every month. Because FMTM is intentionally discarding strong momentum stocks and over concentrating in fewer stocks that have peaked, FMTM is artificially lowering its potential ceiling by being too concentrated.

Index drift from the S&P500 isn't necessarily an issue otherwise etfs that closely follow the S&P500 like TOPT (top 20 S&P500 stocks) would outperform SPMO and FMTM. AVUV's performance for US small cap value has overall matched the S&P500s performance for the past 5 years and is currently outperforming FMTM YTD.
Momentum doesn't work very well with volatility. It's why IDMO outperformed EEMO over the past decade for example.
You are right more holdings would smooth the price movement but not necessarily about lowering the ceiling. There are many more than just 30 stocks with strong positive momentum every month. Because FMTM is intentionally discarding strong momentum stocks and over concentrating in fewer stocks that have peaked, FMTM is artificially lowering its potential ceiling by being too concentrated.