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Is Invesco S&P 500 Pure Growth ETF (RPG) a Strong ETF Right Now?
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The Invesco S&P 500 Pure Growth ETF (RPG - Free Report) made its debut on 03/01/2006, and is a smart beta exchange traded fund that provides broad exposure to the Style Box - Large Cap Growth category of the market.
What Are Smart Beta ETFs?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
The fund is managed by Invesco, and has been able to amass over $3.67 billion, which makes it one of the larger ETFs in the Style Box - Large Cap Growth. Before fees and expenses, this particular fund seeks to match the performance of the S&P 500 Pure Growth Index.
The S&P 500 Pure Growth Index is narrow in focus, containing only those S&P 500 companies with strong growth characteristics as selected by Standard & Poors. As of December 31. 2010 the Index included 125 of the constituents that comprise the S&P 500.
Cost & Other Expenses
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Operating expenses on an annual basis are 0.35% for this ETF, which makes it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 0.08%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Information Technology sector - about 41.40% of the portfolio. Healthcare and Consumer Discretionary round out the top three.
When you look at individual holdings, Tesla Inc (TSLA - Free Report) accounts for about 2.94% of the fund's total assets, followed by Nvidia Corp (NVDA - Free Report) and Etsy Inc (ETSY - Free Report) .
The top 10 holdings account for about 24.09% of total assets under management.
Performance and Risk
Year-to-date, the Invesco S&P 500 Pure Growth ETF return is roughly 37.42% so far, and was up about 44.09% over the last 12 months (as of 11/22/2021). RPG has traded between $151.58 and $220.95 in this past 52-week period.
The fund has a beta of 1.10 and standard deviation of 25.90% for the trailing three-year period, which makes RPG a medium risk choice in this particular space. With about 76 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco S&P 500 Pure Growth ETF is an excellent option for investors seeking to outperform the Style Box - Large Cap Growth segment of the market. There are other ETFs in the space which investors could consider as well.
Vanguard Growth ETF (VUG - Free Report) tracks CRSP U.S. Large Cap Growth Index and the Invesco QQQ (QQQ - Free Report) tracks NASDAQ-100 Index. Vanguard Growth ETF has $91.65 billion in assets, Invesco QQQ has $211.39 billion. VUG has an expense ratio of 0.04% and QQQ charges 0.20%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - Large Cap Growth.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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Is Invesco S&P 500 Pure Growth ETF (RPG) a Strong ETF Right Now?
The Invesco S&P 500 Pure Growth ETF (RPG - Free Report) made its debut on 03/01/2006, and is a smart beta exchange traded fund that provides broad exposure to the Style Box - Large Cap Growth category of the market.
What Are Smart Beta ETFs?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
The fund is managed by Invesco, and has been able to amass over $3.67 billion, which makes it one of the larger ETFs in the Style Box - Large Cap Growth. Before fees and expenses, this particular fund seeks to match the performance of the S&P 500 Pure Growth Index.
The S&P 500 Pure Growth Index is narrow in focus, containing only those S&P 500 companies with strong growth characteristics as selected by Standard & Poors. As of December 31. 2010 the Index included 125 of the constituents that comprise the S&P 500.
Cost & Other Expenses
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Operating expenses on an annual basis are 0.35% for this ETF, which makes it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 0.08%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Information Technology sector - about 41.40% of the portfolio. Healthcare and Consumer Discretionary round out the top three.
When you look at individual holdings, Tesla Inc (TSLA - Free Report) accounts for about 2.94% of the fund's total assets, followed by Nvidia Corp (NVDA - Free Report) and Etsy Inc (ETSY - Free Report) .
The top 10 holdings account for about 24.09% of total assets under management.
Performance and Risk
Year-to-date, the Invesco S&P 500 Pure Growth ETF return is roughly 37.42% so far, and was up about 44.09% over the last 12 months (as of 11/22/2021). RPG has traded between $151.58 and $220.95 in this past 52-week period.
The fund has a beta of 1.10 and standard deviation of 25.90% for the trailing three-year period, which makes RPG a medium risk choice in this particular space. With about 76 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco S&P 500 Pure Growth ETF is an excellent option for investors seeking to outperform the Style Box - Large Cap Growth segment of the market. There are other ETFs in the space which investors could consider as well.
Vanguard Growth ETF (VUG - Free Report) tracks CRSP U.S. Large Cap Growth Index and the Invesco QQQ (QQQ - Free Report) tracks NASDAQ-100 Index. Vanguard Growth ETF has $91.65 billion in assets, Invesco QQQ has $211.39 billion. VUG has an expense ratio of 0.04% and QQQ charges 0.20%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - Large Cap Growth.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.