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Should Invesco S&P SmallCap 600 Revenue ETF (RWJ) Be on Your Investing Radar?
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If you're interested in broad exposure to the Small Cap Blend segment of the US equity market, look no further than the Invesco S&P SmallCap 600 Revenue ETF (RWJ - Free Report) , a passively managed exchange traded fund launched on 02/22/2008.
The fund is sponsored by Invesco. It has amassed assets over $1.17 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
There's a lot of potential to investing in small cap companies, but with market capitalization below $2 billion, that high potential comes with even higher risk.
Blend ETFs usually hold a mix of growth and value stocks as well as stocks that exhibit both value and growth characteristics.
Costs
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.
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 1.26%.
Sector Exposure and Top Holdings
ETFs offer a 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.
This ETF has heaviest allocation to the Consumer Discretionary sector--about 22.90% of the portfolio. Industrials and Energy round out the top three.
Looking at individual holdings, World Fuel Services Corp accounts for about 5.16% 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 17.66% 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 lost about -0.45% so far this year and is down about -7.11% in the last one year (as of 04/26/2023). In the past 52-week period, it has traded between $95.98 and $126.98.
The ETF has a beta of 1.32 and standard deviation of 30.40% for the trailing three-year period, making it a high risk choice in the space. With about 598 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 $48.27 billion in assets, iShares Core S&P Small-Cap ETF has $63.90 billion. IWM has an expense ratio of 0.19% and IJR charges 0.06%.
Bottom-Line
While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.
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?
If you're interested in broad exposure to the Small Cap Blend segment of the US equity market, look no further than the Invesco S&P SmallCap 600 Revenue ETF (RWJ - Free Report) , a passively managed exchange traded fund launched on 02/22/2008.
The fund is sponsored by Invesco. It has amassed assets over $1.17 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
There's a lot of potential to investing in small cap companies, but with market capitalization below $2 billion, that high potential comes with even higher risk.
Blend ETFs usually hold a mix of growth and value stocks as well as stocks that exhibit both value and growth characteristics.
Costs
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.
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 1.26%.
Sector Exposure and Top Holdings
ETFs offer a 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.
This ETF has heaviest allocation to the Consumer Discretionary sector--about 22.90% of the portfolio. Industrials and Energy round out the top three.
Looking at individual holdings, World Fuel Services Corp accounts for about 5.16% 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 17.66% 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 lost about -0.45% so far this year and is down about -7.11% in the last one year (as of 04/26/2023). In the past 52-week period, it has traded between $95.98 and $126.98.
The ETF has a beta of 1.32 and standard deviation of 30.40% for the trailing three-year period, making it a high risk choice in the space. With about 598 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 $48.27 billion in assets, iShares Core S&P Small-Cap ETF has $63.90 billion. IWM has an expense ratio of 0.19% and IJR charges 0.06%.
Bottom-Line
While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.
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.