The Invesco S&P Ultra Dividend Revenue ETF (
RDIV Quick Quote RDIV - Free Report) was launched on 10/01/2013, and is a passively managed exchange traded fund designed to offer broad exposure to the Large Cap Value segment of the US equity market.
The fund is sponsored by Invesco. It has amassed assets over $721.30 million, making it one of the average sized ETFs attempting to match the Large Cap Value segment of the US equity market.
Why Large Cap Value
Large cap companies typically have a market capitalization above $10 billion. Considered a more stable option, large cap companies boast more predictable cash flows and are less volatile than their mid and small cap counterparts.
While value stocks have lower than average price-to-earnings and price-to-book ratios, they also have lower than average sales and earnings growth rates. Value stocks have outperformed growth stocks in nearly all markets when you consider long-term performance, growth stocks are more likely to outpace value stocks in strong bull markets.
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 4.91%.
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.
This ETF has heaviest allocation to the Financials sector--about 21.20% of the portfolio. Materials and Information Technology round out the top three.
Looking at individual holdings, Phillips 66 (
PSX Quick Quote PSX - Free Report) accounts for about 5.67% of total assets, followed by Occidental Petroleum Corp ( OXY Quick Quote OXY - Free Report) and Pfizer Inc ( PFE Quick Quote PFE - Free Report) .
The top 10 holdings account for about 49.85% of total assets under management.
Performance and Risk
RDIV seeks to match the performance of the OFI Revenue Weighted Ultra Dividend Index before fees and expenses. The OFI Revenue Weighted Ultra Dividend Index is constructed by identifying the top 60 securities from the S&P 900 Index with the highest average of the 1-year trailing dividend yields for the current quarter and each of the past three quarters which are then re-weighted according to the revenue earned by the companies.
The ETF has added about 19.44% so far this year and is up about 48.06% in the last one year (as of 07/21/2021). In the past 52-week period, it has traded between $26.28 and $43.55.
The ETF has a beta of 1.31 and standard deviation of 31.39% for the trailing three-year period, making it a medium risk choice in the space. With about 60 holdings, it effectively diversifies company-specific risk.
Invesco S&P Ultra Dividend Revenue ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, RDIV is an outstanding option for investors seeking exposure to the Style Box - Large Cap Value segment of the market. There are other additional ETFs in the space that investors could consider as well.
The iShares Russell 1000 Value ETF (
IWD Quick Quote IWD - Free Report) and the Vanguard Value ETF ( VTV Quick Quote VTV - Free Report) track a similar index. While iShares Russell 1000 Value ETF has $53.13 billion in assets, Vanguard Value ETF has $81.23 billion. IWD has an expense ratio of 0.19% and VTV charges 0.04%. 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.