Launched on 03/01/2006, the Invesco S&P MidCap 400 Pure Growth ETF (
RFG Quick Quote RFG - Free Report) is a passively managed exchange traded fund designed to provide a broad exposure to the Mid Cap Growth segment of the US equity market.
The fund is sponsored by Invesco. It has amassed assets over $315.70 million, making it one of the average sized ETFs attempting to match the Mid Cap Growth segment of the US equity market.
Why Mid Cap Growth
Mid cap companies have market capitalization between $2 billion and $10 billion. They usually have higher growth prospects than large cap companies and are less volatile than small cap companies. Thus, companies that fall under this category provide a stable and growth-heavy investment.
Growth stocks have higher than average sales and earnings growth rates. While these are expected to grow faster than the broader market, they also have higher valuations. Also, growth stocks are a type of equity that carries more risk compared to others. Compared to value stocks, growth stocks are a safer bet in a strong bull market, but don't perform as strongly in almost all other financial environments.
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 0.35%, putting it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 0.15%.
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 Information Technology sector--about 22.10% of the portfolio. Healthcare and Consumer Discretionary round out the top three.
Looking at individual holdings, Digital Turbine Inc (
APPS Quick Quote APPS - Free Report) accounts for about 3.35% of total assets, followed by Repligen Corp ( RGEN Quick Quote RGEN - Free Report) and Rh ( RH Quick Quote RH - Free Report) .
The top 10 holdings account for about 25.25% of total assets under management.
Performance and Risk
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.
The ETF has lost about -9.55% so far this year and is down about -4.55% in the last one year (as of 03/29/2022). In the past 52-week period, it has traded between $190.90 and $245.79.
The ETF has a beta of 1.17 and standard deviation of 28.54% for the trailing three-year period, making it a medium risk choice in the space. With about 83 holdings, it effectively diversifies company-specific risk.
Invesco S&P MidCap 400 Pure Growth 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, RFG is a sufficient option for those seeking exposure to the Style Box - Mid Cap Growth area of the market. Investors might also want to consider some other ETF options in the space.
The Vanguard MidCap Growth ETF (
VOT Quick Quote VOT - Free Report) and the iShares Russell MidCap Growth ETF ( IWP Quick Quote IWP - Free Report) track a similar index. While Vanguard MidCap Growth ETF has $11.10 billion in assets, iShares Russell MidCap Growth ETF has $13.88 billion. VOT has an expense ratio of 0.07% and IWP charges 0.23%. Bottom-Line
An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also 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.