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Should Invesco S&P MidCap 400 Revenue ETF (RWK) Be on Your Investing Radar?
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The Invesco S&P MidCap 400 Revenue ETF (RWK - Free Report) was launched on 02/22/2008, and is a passively managed exchange traded fund designed to offer broad exposure to the Mid Cap Value segment of the US equity market.
The fund is sponsored by Invesco. It has amassed assets over $431.34 million, making it one of the average sized ETFs attempting to match the Mid Cap Value segment of the US equity market.
Why Mid Cap Value
Compared to large and small cap companies, mid cap businesses tend to have higher growth prospects and are less volatile, respectively, with market capitalization between $2 billion and $10 billion. Thus they have a nice balance of growth potential and stability.
Carrying lower than average price-to-earnings and price-to-book ratios, value stocks also have lower than average sales and earnings growth rates. Looking at their long-term performance, value stocks have outperformed growth stocks in almost all markets. They are however likely to underperform growth stocks in strong bull markets.
Costs
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
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 0.70%.
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 Industrials sector--about 21.40% of the portfolio. Consumer Discretionary and Information Technology round out the top three.
Looking at individual holdings, Arrow Electronics Inc (ARW - Free Report) accounts for about 2.22% of total assets, followed by Jabil Inc (JBL - Free Report) and Synnex Corp (SNX - Free Report) .
The top 10 holdings account for about 16.04% of total assets under management.
Performance and Risk
RWK seeks to match the performance of the OFI Revenue Weighted Mid Cap Index before fees and expenses. The OFI Revenue Weighted Mid Cap Index is constructed by re-weighting the constituent securities of the S&P MidCap 400 Index according to the revenue earned by the companies in the S&P MidCap 400 Index.
The ETF return is roughly 30.50% so far this year and was up about 89.32% in the last one year (as of 05/19/2021). In the past 52-week period, it has traded between $48.77 and $92.98.
The ETF has a beta of 1.45 and standard deviation of 29.73% for the trailing three-year period, making it a medium risk choice in the space. With about 401 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco S&P MidCap 400 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, RWK is a reasonable option for those seeking exposure to the Style Box - Mid Cap Value area of the market. Investors might also want to consider some other ETF options in the space.
The iShares Russell MidCap Value ETF (IWS - Free Report) and the Vanguard MidCap Value ETF (VOE - Free Report) track a similar index. While iShares Russell MidCap Value ETF has $14.06 billion in assets, Vanguard MidCap Value ETF has $14.17 billion. IWS has an expense ratio of 0.24% and VOE charges 0.07%.
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 MidCap 400 Revenue ETF (RWK) Be on Your Investing Radar?
The Invesco S&P MidCap 400 Revenue ETF (RWK - Free Report) was launched on 02/22/2008, and is a passively managed exchange traded fund designed to offer broad exposure to the Mid Cap Value segment of the US equity market.
The fund is sponsored by Invesco. It has amassed assets over $431.34 million, making it one of the average sized ETFs attempting to match the Mid Cap Value segment of the US equity market.
Why Mid Cap Value
Compared to large and small cap companies, mid cap businesses tend to have higher growth prospects and are less volatile, respectively, with market capitalization between $2 billion and $10 billion. Thus they have a nice balance of growth potential and stability.
Carrying lower than average price-to-earnings and price-to-book ratios, value stocks also have lower than average sales and earnings growth rates. Looking at their long-term performance, value stocks have outperformed growth stocks in almost all markets. They are however likely to underperform growth stocks in strong bull markets.
Costs
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
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 0.70%.
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 Industrials sector--about 21.40% of the portfolio. Consumer Discretionary and Information Technology round out the top three.
Looking at individual holdings, Arrow Electronics Inc (ARW - Free Report) accounts for about 2.22% of total assets, followed by Jabil Inc (JBL - Free Report) and Synnex Corp (SNX - Free Report) .
The top 10 holdings account for about 16.04% of total assets under management.
Performance and Risk
RWK seeks to match the performance of the OFI Revenue Weighted Mid Cap Index before fees and expenses. The OFI Revenue Weighted Mid Cap Index is constructed by re-weighting the constituent securities of the S&P MidCap 400 Index according to the revenue earned by the companies in the S&P MidCap 400 Index.
The ETF return is roughly 30.50% so far this year and was up about 89.32% in the last one year (as of 05/19/2021). In the past 52-week period, it has traded between $48.77 and $92.98.
The ETF has a beta of 1.45 and standard deviation of 29.73% for the trailing three-year period, making it a medium risk choice in the space. With about 401 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco S&P MidCap 400 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, RWK is a reasonable option for those seeking exposure to the Style Box - Mid Cap Value area of the market. Investors might also want to consider some other ETF options in the space.
The iShares Russell MidCap Value ETF (IWS - Free Report) and the Vanguard MidCap Value ETF (VOE - Free Report) track a similar index. While iShares Russell MidCap Value ETF has $14.06 billion in assets, Vanguard MidCap Value ETF has $14.17 billion. IWS has an expense ratio of 0.24% and VOE charges 0.07%.
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.