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Should Invesco S&P MidCap 400 Pure Growth ETF (RFG) Be on Your Investing Radar?
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Designed to provide broad exposure to the Mid Cap Growth segment of the US equity market, the Invesco S&P MidCap 400 Pure Growth ETF (RFG - Free Report) is a passively managed exchange traded fund launched on 03/01/2006.
The fund is sponsored by Invesco. It has amassed assets over $283.14 million, making it one of the average sized ETFs attempting to match the Mid Cap Growth segment of the US equity market.
Why Mid Cap Growth
Mid cap companies, with market capitalization in the range of $2 billion and $10 billion, offer investors many things that small and large companies don't, including less risk and higher growth opportunities. Thus, companies that fall under this category provide a stable and growth-heavy investment.
Growth stocks have higher than average sales and earnings growth rates. While these are expected to grow faster than the broader market, they also have higher valuations. Something to keep in mind is the higher level of volatility that is affiliated with growth stocks. Compared to value stocks, growth stocks are a safer bet in a strong bull market, but don't perform as strongly in almost all other financial environments.
Costs
When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.
Annual operating expenses for this ETF are 0.35%, putting it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 0.16%.
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 to the Financials sector--about 19.30% of the portfolio. Consumer Discretionary and Materials round out the top three.
Looking at individual holdings, Cleveland-Cliffs Inc (CLF - Free Report) accounts for about 3.36% of total assets, followed by Louisiana-Pacific Corp (LPX - Free Report) and Concentrix Corp (CNXC - Free Report) .
The top 10 holdings account for about 25.73% of total assets under management.
Performance and Risk
RFG seeks to match the performance of the S&P MidCap 400 Pure Growth Index before fees and expenses. The S&P MidCap 400 Pure Growth Index measures the performance of securities that exhibit strong growth characteristics in the S&P MidCap 400 Index.
The ETF has lost about -17.24% so far this year and is down about -13.82% in the last one year (as of 05/31/2022). In the past 52-week period, it has traded between $171.61 and $245.79.
The ETF has a beta of 1.15 and standard deviation of 29.65% for the trailing three-year period, making it a medium risk choice in the space. With about 87 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco S&P MidCap 400 Pure Growth ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, RFG is a sufficient option for those seeking exposure to the Style Box - Mid Cap Growth area of the market. Investors might also want to consider some other ETF options in the space.
The Vanguard MidCap Growth ETF (VOT - Free Report) and the iShares Russell MidCap Growth ETF (IWP - Free Report) track a similar index. While Vanguard MidCap Growth ETF has $9.85 billion in assets, iShares Russell MidCap Growth ETF has $12.13 billion. VOT has an expense ratio of 0.07% and IWP charges 0.23%.
Bottom-Line
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.
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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Should Invesco S&P MidCap 400 Pure Growth ETF (RFG) Be on Your Investing Radar?
Designed to provide broad exposure to the Mid Cap Growth segment of the US equity market, the Invesco S&P MidCap 400 Pure Growth ETF (RFG - Free Report) is a passively managed exchange traded fund launched on 03/01/2006.
The fund is sponsored by Invesco. It has amassed assets over $283.14 million, making it one of the average sized ETFs attempting to match the Mid Cap Growth segment of the US equity market.
Why Mid Cap Growth
Mid cap companies, with market capitalization in the range of $2 billion and $10 billion, offer investors many things that small and large companies don't, including less risk and higher growth opportunities. Thus, companies that fall under this category provide a stable and growth-heavy investment.
Growth stocks have higher than average sales and earnings growth rates. While these are expected to grow faster than the broader market, they also have higher valuations. Something to keep in mind is the higher level of volatility that is affiliated with growth stocks. Compared to value stocks, growth stocks are a safer bet in a strong bull market, but don't perform as strongly in almost all other financial environments.
Costs
When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.
Annual operating expenses for this ETF are 0.35%, putting it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 0.16%.
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 to the Financials sector--about 19.30% of the portfolio. Consumer Discretionary and Materials round out the top three.
Looking at individual holdings, Cleveland-Cliffs Inc (CLF - Free Report) accounts for about 3.36% of total assets, followed by Louisiana-Pacific Corp (LPX - Free Report) and Concentrix Corp (CNXC - Free Report) .
The top 10 holdings account for about 25.73% of total assets under management.
Performance and Risk
RFG seeks to match the performance of the S&P MidCap 400 Pure Growth Index before fees and expenses. The S&P MidCap 400 Pure Growth Index measures the performance of securities that exhibit strong growth characteristics in the S&P MidCap 400 Index.
The ETF has lost about -17.24% so far this year and is down about -13.82% in the last one year (as of 05/31/2022). In the past 52-week period, it has traded between $171.61 and $245.79.
The ETF has a beta of 1.15 and standard deviation of 29.65% for the trailing three-year period, making it a medium risk choice in the space. With about 87 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco S&P MidCap 400 Pure Growth ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, RFG is a sufficient option for those seeking exposure to the Style Box - Mid Cap Growth area of the market. Investors might also want to consider some other ETF options in the space.
The Vanguard MidCap Growth ETF (VOT - Free Report) and the iShares Russell MidCap Growth ETF (IWP - Free Report) track a similar index. While Vanguard MidCap Growth ETF has $9.85 billion in assets, iShares Russell MidCap Growth ETF has $12.13 billion. VOT has an expense ratio of 0.07% and IWP charges 0.23%.
Bottom-Line
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.
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.