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Should Invesco S&P MidCap 400 Revenue ETF (RWK) Be on Your Investing Radar?
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Designed to provide broad exposure to the Mid Cap Value segment of the US equity market, the Invesco S&P MidCap 400 Revenue ETF (RWK - Free Report) is a passively managed exchange traded fund launched on 02/22/2008.
The fund is sponsored by Invesco. It has amassed assets over $391.22 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
Mid cap companies, with market capitalization in the range of $2 billion and $10 billion, offer investors many things that small and large companies don't, including less risk and higher growth opportunities. Thus, companies that fall under this category provide a stable and growth-heavy investment.
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. Considering long-term performance, value stocks have outperformed growth stocks in almost all markets; however, they are more likely to underperform growth stocks in strong bull markets.
Costs
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
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 0.96%.
Sector Exposure and Top Holdings
ETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Consumer Discretionary sector--about 21.90% of the portfolio. Industrials and Information Technology round out the top three.
Looking at individual holdings, Performance Food Group Co (PFGC - Free Report) accounts for about 2.45% of total assets, followed by Arrow Electronics Inc (ARW - Free Report) and Jabil Inc (JBL - Free Report) .
The top 10 holdings account for about 16.35% 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 S&P MidCap 400 Revenue-Weighted Index is constructed using a rules-based methodology that re-weights the constituent securities of the S&P MidCap 400 Index according to the revenue earned by the companies in the parent index, subject to a maximum 5% per company weighting.
The ETF has lost about -4.27% so far this year and it's up approximately 2.65% in the last one year (as of 04/19/2022). In the past 52-week period, it has traded between $83.54 and $96.56.
The ETF has a beta of 1.36 and standard deviation of 30.39% for the trailing three-year period, making it a medium risk choice in the space. With about 392 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 good 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 $14.76 billion in assets, Vanguard MidCap Value ETF has $16.93 billion. IWS has an expense ratio of 0.23% and VOE charges 0.07%.
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.
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Should Invesco S&P MidCap 400 Revenue ETF (RWK) Be on Your Investing Radar?
Designed to provide broad exposure to the Mid Cap Value segment of the US equity market, the Invesco S&P MidCap 400 Revenue ETF (RWK - Free Report) is a passively managed exchange traded fund launched on 02/22/2008.
The fund is sponsored by Invesco. It has amassed assets over $391.22 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
Mid cap companies, with market capitalization in the range of $2 billion and $10 billion, offer investors many things that small and large companies don't, including less risk and higher growth opportunities. Thus, companies that fall under this category provide a stable and growth-heavy investment.
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. Considering long-term performance, value stocks have outperformed growth stocks in almost all markets; however, they are more likely to underperform growth stocks in strong bull markets.
Costs
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
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 0.96%.
Sector Exposure and Top Holdings
ETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Consumer Discretionary sector--about 21.90% of the portfolio. Industrials and Information Technology round out the top three.
Looking at individual holdings, Performance Food Group Co (PFGC - Free Report) accounts for about 2.45% of total assets, followed by Arrow Electronics Inc (ARW - Free Report) and Jabil Inc (JBL - Free Report) .
The top 10 holdings account for about 16.35% 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 S&P MidCap 400 Revenue-Weighted Index is constructed using a rules-based methodology that re-weights the constituent securities of the S&P MidCap 400 Index according to the revenue earned by the companies in the parent index, subject to a maximum 5% per company weighting.
The ETF has lost about -4.27% so far this year and it's up approximately 2.65% in the last one year (as of 04/19/2022). In the past 52-week period, it has traded between $83.54 and $96.56.
The ETF has a beta of 1.36 and standard deviation of 30.39% for the trailing three-year period, making it a medium risk choice in the space. With about 392 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 good 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 $14.76 billion in assets, Vanguard MidCap Value ETF has $16.93 billion. IWS has an expense ratio of 0.23% and VOE charges 0.07%.
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.