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Should Invesco S&P SmallCap 600 Revenue ETF (RWJ) Be on Your Investing Radar?
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Launched on 02/22/2008, the Invesco S&P SmallCap 600 Revenue ETF (RWJ - Free Report) is a passively managed exchange traded fund designed to provide a broad exposure to the Small Cap Blend segment of the US equity market.
The fund is sponsored by Invesco. It has amassed assets over $1.22 billion, making it one of the larger ETFs attempting to match the Small Cap Blend segment of the US equity market.
Why Small Cap Blend
Sitting at a market capitalization below $2 billion, small cap companies tend to be high-potential stocks compared to its large and mid cap counterparts, but come with higher risk.
Typically holding a combination of both growth and value stocks, blend ETFs also demonstrate qualities seen in value and growth investments.
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 0.39%, putting it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 0.88%.
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 Consumer Discretionary sector--about 23.90% of the portfolio. Industrials and Energy round out the top three.
Looking at individual holdings, World Fuel Services Corp accounts for about 5.31% of total assets, followed by United Natural Foods Inc (UNFI - Free Report) and Andersons Inc/the (ANDE - Free Report) .
The top 10 holdings account for about 16.48% of total assets under management.
Performance and Risk
RWJ seeks to match the performance of the OFI Revenue Weighted Small Cap Index before fees and expenses. The S&P SmallCap 600 Revenue-Weighted Index is constructed using a rules-based methodology that re-weights the constituent securities of the S&P SmallCap 600 Index according to the revenue earned by the companies in the parent index, subject to a maximum 5% per company weighting.
The ETF has added about 15.28% so far this year and it's up approximately 6.49% in the last one year (as of 02/21/2023). In the past 52-week period, it has traded between $95.98 and $126.98.
The ETF has a beta of 1.33 and standard deviation of 36.05% for the trailing three-year period, making it a high risk choice in the space. With about 600 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco S&P SmallCap 600 Revenue 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, RWJ is a sufficient option for those seeking exposure to the Style Box - Small Cap Blend area of the market. Investors might also want to consider some other ETF options in the space.
The iShares Russell 2000 ETF (IWM - Free Report) and the iShares Core S&P Small-Cap ETF (IJR - Free Report) track a similar index. While iShares Russell 2000 ETF has $56.36 billion in assets, iShares Core S&P Small-Cap ETF has $72.83 billion. IWM has an expense ratio of 0.19% and IJR charges 0.06%.
Bottom-Line
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are 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 SmallCap 600 Revenue ETF (RWJ) Be on Your Investing Radar?
Launched on 02/22/2008, the Invesco S&P SmallCap 600 Revenue ETF (RWJ - Free Report) is a passively managed exchange traded fund designed to provide a broad exposure to the Small Cap Blend segment of the US equity market.
The fund is sponsored by Invesco. It has amassed assets over $1.22 billion, making it one of the larger ETFs attempting to match the Small Cap Blend segment of the US equity market.
Why Small Cap Blend
Sitting at a market capitalization below $2 billion, small cap companies tend to be high-potential stocks compared to its large and mid cap counterparts, but come with higher risk.
Typically holding a combination of both growth and value stocks, blend ETFs also demonstrate qualities seen in value and growth investments.
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 0.39%, putting it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 0.88%.
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 Consumer Discretionary sector--about 23.90% of the portfolio. Industrials and Energy round out the top three.
Looking at individual holdings, World Fuel Services Corp accounts for about 5.31% of total assets, followed by United Natural Foods Inc (UNFI - Free Report) and Andersons Inc/the (ANDE - Free Report) .
The top 10 holdings account for about 16.48% of total assets under management.
Performance and Risk
RWJ seeks to match the performance of the OFI Revenue Weighted Small Cap Index before fees and expenses. The S&P SmallCap 600 Revenue-Weighted Index is constructed using a rules-based methodology that re-weights the constituent securities of the S&P SmallCap 600 Index according to the revenue earned by the companies in the parent index, subject to a maximum 5% per company weighting.
The ETF has added about 15.28% so far this year and it's up approximately 6.49% in the last one year (as of 02/21/2023). In the past 52-week period, it has traded between $95.98 and $126.98.
The ETF has a beta of 1.33 and standard deviation of 36.05% for the trailing three-year period, making it a high risk choice in the space. With about 600 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco S&P SmallCap 600 Revenue 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, RWJ is a sufficient option for those seeking exposure to the Style Box - Small Cap Blend area of the market. Investors might also want to consider some other ETF options in the space.
The iShares Russell 2000 ETF (IWM - Free Report) and the iShares Core S&P Small-Cap ETF (IJR - Free Report) track a similar index. While iShares Russell 2000 ETF has $56.36 billion in assets, iShares Core S&P Small-Cap ETF has $72.83 billion. IWM has an expense ratio of 0.19% and IJR charges 0.06%.
Bottom-Line
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are 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.