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Is Invesco S&P 500 Pure Growth ETF (RPG) a Strong ETF Right Now?
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A smart beta exchange traded fund, the Invesco S&P 500 Pure Growth ETF (RPG - Free Report) debuted on 03/01/2006, and offers broad exposure to the Style Box - Large Cap Growth category of the market.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
Because the fund has amassed over $1.68 billion, this makes it one of the average sized ETFs in the Style Box - Large Cap Growth. RPG is managed by Invesco. This particular fund seeks to match the performance of the S&P 500 Pure Growth Index before fees and expenses.
The S&P 500 Pure Growth Index measures the performance of securities that exhibit strong growth characteristics in the S&P 500 Index.
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 RPG, making it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 1.50%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
For RPG, it has heaviest allocation in the Energy sector --about 27% of the portfolio --while Healthcare and Information Technology round out the top three.
Taking into account individual holdings, Diamondback Energy Inc (FANG - Free Report) accounts for about 2.68% of the fund's total assets, followed by Targa Resources Corp (TRGP - Free Report) and Coterra Energy Inc (CTRA - Free Report) .
The top 10 holdings account for about 24.35% of total assets under management.
Performance and Risk
The ETF has lost about -3.97% so far this year and is up roughly 5.31% in the last one year (as of 01/05/2024). In the past 52-week period, it has traded between $28.62 and $32.47.
The ETF has a beta of 1.11 and standard deviation of 23.86% for the trailing three-year period, making it a medium risk choice in the space. With about 82 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 $100.35 billion in assets, Invesco QQQ has $222.63 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?
A smart beta exchange traded fund, the Invesco S&P 500 Pure Growth ETF (RPG - Free Report) debuted on 03/01/2006, and offers broad exposure to the Style Box - Large Cap Growth category of the market.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
Because the fund has amassed over $1.68 billion, this makes it one of the average sized ETFs in the Style Box - Large Cap Growth. RPG is managed by Invesco. This particular fund seeks to match the performance of the S&P 500 Pure Growth Index before fees and expenses.
The S&P 500 Pure Growth Index measures the performance of securities that exhibit strong growth characteristics in the S&P 500 Index.
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 RPG, making it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 1.50%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
For RPG, it has heaviest allocation in the Energy sector --about 27% of the portfolio --while Healthcare and Information Technology round out the top three.
Taking into account individual holdings, Diamondback Energy Inc (FANG - Free Report) accounts for about 2.68% of the fund's total assets, followed by Targa Resources Corp (TRGP - Free Report) and Coterra Energy Inc (CTRA - Free Report) .
The top 10 holdings account for about 24.35% of total assets under management.
Performance and Risk
The ETF has lost about -3.97% so far this year and is up roughly 5.31% in the last one year (as of 01/05/2024). In the past 52-week period, it has traded between $28.62 and $32.47.
The ETF has a beta of 1.11 and standard deviation of 23.86% for the trailing three-year period, making it a medium risk choice in the space. With about 82 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 $100.35 billion in assets, Invesco QQQ has $222.63 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.