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Is Invesco Russell 1000 Dynamic Multifactor ETF (OMFL) a Strong ETF Right Now?
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The Invesco Russell 1000 Dynamic Multifactor ETF (OMFL - Free Report) made its debut on 11/08/2017, and is a smart beta exchange traded fund that provides broad exposure to the Style Box - Large Cap Growth 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.
A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking 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.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
Because the fund has amassed over $5.38 billion, this makes it one of the larger ETFs in the Style Box - Large Cap Growth. OMFL is managed by Invesco. OMFL seeks to match the performance of the RUSSELL 1000 INVESCO DYNAMIC MLTIFCTR ID before fees and expenses.
The Russell 1000 Invesco Dynamic Multifactor Index is constructed using a rules-based methodology by selecting equity securities from the Russell 1000 Index, which measures the performance of the 1,000 largest-capitalization companies in the United States.
Cost & Other Expenses
Expense ratios are an important factor in the return of an ETF and in the long-term, cheaper funds can significantly outperform their more expensive cousins, other things remaining the same.
Operating expenses on an annual basis are 0.29% for OMFL, making it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 1.42%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Information Technology sector - about 20.10% of the portfolio. Industrials and Financials round out the top three.
When you look at individual holdings, Builders Firstsource Inc (BLDR - Free Report) accounts for about 0.92% of the fund's total assets, followed by Marathon Petroleum Corp (MPC - Free Report) and Pultegroup Inc (PHM - Free Report) .
OMFL's top 10 holdings account for about 7.25% of its total assets under management.
Performance and Risk
So far this year, OMFL has lost about -3.91%, and is up about 9.28% in the last one year (as of 01/17/2024). During this past 52-week period, the fund has traded between $43.21 and $51.71.
The fund has a beta of 1 and standard deviation of 17.92% for the trailing three-year period. With about 718 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco Russell 1000 Dynamic Multifactor ETF is a reasonable option for investors seeking to outperform the Style Box - Large Cap Growth segment of the market. However, there are other ETFs in the space which investors could consider.
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 $105 billion in assets, Invesco QQQ has $232.83 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 Russell 1000 Dynamic Multifactor ETF (OMFL) a Strong ETF Right Now?
The Invesco Russell 1000 Dynamic Multifactor ETF (OMFL - Free Report) made its debut on 11/08/2017, and is a smart beta exchange traded fund that provides broad exposure to the Style Box - Large Cap Growth 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.
A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking 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.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
Because the fund has amassed over $5.38 billion, this makes it one of the larger ETFs in the Style Box - Large Cap Growth. OMFL is managed by Invesco. OMFL seeks to match the performance of the RUSSELL 1000 INVESCO DYNAMIC MLTIFCTR ID before fees and expenses.
The Russell 1000 Invesco Dynamic Multifactor Index is constructed using a rules-based methodology by selecting equity securities from the Russell 1000 Index, which measures the performance of the 1,000 largest-capitalization companies in the United States.
Cost & Other Expenses
Expense ratios are an important factor in the return of an ETF and in the long-term, cheaper funds can significantly outperform their more expensive cousins, other things remaining the same.
Operating expenses on an annual basis are 0.29% for OMFL, making it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 1.42%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Information Technology sector - about 20.10% of the portfolio. Industrials and Financials round out the top three.
When you look at individual holdings, Builders Firstsource Inc (BLDR - Free Report) accounts for about 0.92% of the fund's total assets, followed by Marathon Petroleum Corp (MPC - Free Report) and Pultegroup Inc (PHM - Free Report) .
OMFL's top 10 holdings account for about 7.25% of its total assets under management.
Performance and Risk
So far this year, OMFL has lost about -3.91%, and is up about 9.28% in the last one year (as of 01/17/2024). During this past 52-week period, the fund has traded between $43.21 and $51.71.
The fund has a beta of 1 and standard deviation of 17.92% for the trailing three-year period. With about 718 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco Russell 1000 Dynamic Multifactor ETF is a reasonable option for investors seeking to outperform the Style Box - Large Cap Growth segment of the market. However, there are other ETFs in the space which investors could consider.
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 $105 billion in assets, Invesco QQQ has $232.83 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.