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Is Invesco S&P SmallCap 600 Pure Value ETF (RZV) a Strong ETF Right Now?
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The Invesco S&P SmallCap 600 Pure Value ETF (RZV - 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 - Small Cap Value 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.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: 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.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
Managed by Invesco, RZV has amassed assets over $273.72 million, making it one of the average sized ETFs in the Style Box - Small Cap Value. This particular fund seeks to match the performance of the S&P SmallCap 600 Pure Value Index before fees and expenses.
The S&P SmallCap 600 Pure Value Index measures the performance of securities that exhibit strong value characteristics in the S&P SmallCap 600 Index.
Cost & Other Expenses
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
Annual operating expenses for RZV are 0.35%, which makes it on par with most peer products in the space.
RZV's 12-month trailing dividend yield is 1.29%.
Sector Exposure and Top Holdings
ETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
RZV's heaviest allocation is in the Financials sector, which is about 20% of the portfolio. Its Consumer Discretionary and Industrials round out the top three.
Taking into account individual holdings, Pbf Energy Inc (PBF - Free Report) accounts for about 1.90% of the fund's total assets, followed by Olympic Steel Inc (ZEUS - Free Report) and Mercer International Inc (MERC - Free Report) .
The top 10 holdings account for about 14.7% of total assets under management.
Performance and Risk
The ETF has lost about -5.12% and is down about -9.64% so far this year and in the past one year (as of 11/17/2022), respectively. RZV has traded between $76.31 and $101.49 during this last 52-week period.
The fund has a beta of 1.45 and standard deviation of 36.49% for the trailing three-year period, which makes RZV a high risk choice in this particular space. With about 169 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco S&P SmallCap 600 Pure Value ETF is a reasonable option for investors seeking to outperform the Style Box - Small Cap Value segment of the market. However, there are other ETFs in the space which investors could consider.
IShares Russell 2000 Value ETF (IWN - Free Report) tracks Russell 2000 Value Index and the Vanguard SmallCap Value ETF (VBR - Free Report) tracks CRSP U.S. Small Cap Value Index. IShares Russell 2000 Value ETF has $12.51 billion in assets, Vanguard SmallCap Value ETF has $24.23 billion. IWN has an expense ratio of 0.23% and VBR charges 0.07%.
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 - Small Cap Value.
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 SmallCap 600 Pure Value ETF (RZV) a Strong ETF Right Now?
The Invesco S&P SmallCap 600 Pure Value ETF (RZV - 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 - Small Cap Value 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.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: 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.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
Managed by Invesco, RZV has amassed assets over $273.72 million, making it one of the average sized ETFs in the Style Box - Small Cap Value. This particular fund seeks to match the performance of the S&P SmallCap 600 Pure Value Index before fees and expenses.
The S&P SmallCap 600 Pure Value Index measures the performance of securities that exhibit strong value characteristics in the S&P SmallCap 600 Index.
Cost & Other Expenses
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
Annual operating expenses for RZV are 0.35%, which makes it on par with most peer products in the space.
RZV's 12-month trailing dividend yield is 1.29%.
Sector Exposure and Top Holdings
ETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
RZV's heaviest allocation is in the Financials sector, which is about 20% of the portfolio. Its Consumer Discretionary and Industrials round out the top three.
Taking into account individual holdings, Pbf Energy Inc (PBF - Free Report) accounts for about 1.90% of the fund's total assets, followed by Olympic Steel Inc (ZEUS - Free Report) and Mercer International Inc (MERC - Free Report) .
The top 10 holdings account for about 14.7% of total assets under management.
Performance and Risk
The ETF has lost about -5.12% and is down about -9.64% so far this year and in the past one year (as of 11/17/2022), respectively. RZV has traded between $76.31 and $101.49 during this last 52-week period.
The fund has a beta of 1.45 and standard deviation of 36.49% for the trailing three-year period, which makes RZV a high risk choice in this particular space. With about 169 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco S&P SmallCap 600 Pure Value ETF is a reasonable option for investors seeking to outperform the Style Box - Small Cap Value segment of the market. However, there are other ETFs in the space which investors could consider.
IShares Russell 2000 Value ETF (IWN - Free Report) tracks Russell 2000 Value Index and the Vanguard SmallCap Value ETF (VBR - Free Report) tracks CRSP U.S. Small Cap Value Index. IShares Russell 2000 Value ETF has $12.51 billion in assets, Vanguard SmallCap Value ETF has $24.23 billion. IWN has an expense ratio of 0.23% and VBR charges 0.07%.
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 - Small Cap Value.
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.