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Is Invesco S&P MidCap 400 Pure Growth ETF (RFG) a Strong ETF Right Now?
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Making its debut on 03/01/2006, smart beta exchange traded fund Invesco S&P MidCap 400 Pure Growth ETF (RFG - Free Report) provides investors broad exposure to the Style Box - Mid 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.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
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.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
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
The fund is managed by Invesco. RFG has been able to amass assets over $327.35 million, making it one of the average sized ETFs in the Style Box - Mid Cap Growth. RFG seeks to match the performance of the S&P MidCap 400 Pure Growth Index before fees and expenses.
The S&P MidCap 400 Pure Growth Index measures the performance of securities that exhibit strong growth characteristics in the S&P MidCap 400 Index.
Cost & Other Expenses
For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.
Annual operating expenses for RFG are 0.35%, which makes it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 0.73%.
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.
RFG's heaviest allocation is in the Consumer Discretionary sector, which is about 23% of the portfolio. Its Industrials and Energy round out the top three.
Looking at individual holdings, Southwestern Energy Co (SWN - Free Report) accounts for about 2.48% of total assets, followed by Super Micro Computer Inc (SMCI - Free Report) and Cnx Resources Corp (CNX - Free Report) .
Its top 10 holdings account for approximately 20.72% of RFG's total assets under management.
Performance and Risk
The ETF has added about 19.66% so far this year and is up about 37.13% in the last one year (as of 04/05/2024). In the past 52-week period, it has traded between $35.31 and $50.70.
RFG has a beta of 1.14 and standard deviation of 23.25% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 81 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco S&P MidCap 400 Pure Growth ETF is an excellent option for investors seeking to outperform the Style Box - Mid Cap Growth segment of the market. There are other ETFs in the space which investors could consider as well.
Vanguard Mid-Cap Growth ETF (VOT - Free Report) tracks CRSP U.S. Mid Cap Growth Index and the iShares Russell Mid-Cap Growth ETF (IWP - Free Report) tracks Russell MidCap Growth Index. Vanguard Mid-Cap Growth ETF has $12.90 billion in assets, iShares Russell Mid-Cap Growth ETF has $15.08 billion. VOT has an expense ratio of 0.07% and IWP charges 0.23%.
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 - Mid 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 MidCap 400 Pure Growth ETF (RFG) a Strong ETF Right Now?
Making its debut on 03/01/2006, smart beta exchange traded fund Invesco S&P MidCap 400 Pure Growth ETF (RFG - Free Report) provides investors broad exposure to the Style Box - Mid 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.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
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.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
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
The fund is managed by Invesco. RFG has been able to amass assets over $327.35 million, making it one of the average sized ETFs in the Style Box - Mid Cap Growth. RFG seeks to match the performance of the S&P MidCap 400 Pure Growth Index before fees and expenses.
The S&P MidCap 400 Pure Growth Index measures the performance of securities that exhibit strong growth characteristics in the S&P MidCap 400 Index.
Cost & Other Expenses
For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.
Annual operating expenses for RFG are 0.35%, which makes it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 0.73%.
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.
RFG's heaviest allocation is in the Consumer Discretionary sector, which is about 23% of the portfolio. Its Industrials and Energy round out the top three.
Looking at individual holdings, Southwestern Energy Co (SWN - Free Report) accounts for about 2.48% of total assets, followed by Super Micro Computer Inc (SMCI - Free Report) and Cnx Resources Corp (CNX - Free Report) .
Its top 10 holdings account for approximately 20.72% of RFG's total assets under management.
Performance and Risk
The ETF has added about 19.66% so far this year and is up about 37.13% in the last one year (as of 04/05/2024). In the past 52-week period, it has traded between $35.31 and $50.70.
RFG has a beta of 1.14 and standard deviation of 23.25% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 81 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco S&P MidCap 400 Pure Growth ETF is an excellent option for investors seeking to outperform the Style Box - Mid Cap Growth segment of the market. There are other ETFs in the space which investors could consider as well.
Vanguard Mid-Cap Growth ETF (VOT - Free Report) tracks CRSP U.S. Mid Cap Growth Index and the iShares Russell Mid-Cap Growth ETF (IWP - Free Report) tracks Russell MidCap Growth Index. Vanguard Mid-Cap Growth ETF has $12.90 billion in assets, iShares Russell Mid-Cap Growth ETF has $15.08 billion. VOT has an expense ratio of 0.07% and IWP charges 0.23%.
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 - Mid 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.