Designed to provide broad exposure to the Small Cap Value segment of the US equity market, the Invesco S&P SmallCap 600 Pure Value ETF (
RZV Quick Quote RZV - Free Report) is a passively managed exchange traded fund launched on 03/01/2006.
The fund is sponsored by Invesco. It has amassed assets over $263.17 million, making it one of the average sized ETFs attempting to match the Small Cap Value segment of the US equity market.
Why Small Cap Value
Sitting at a market capitalization below $2 billion, small cap companies tend to be high-potential stocks compared to its large and mid cap counterparts, but come with higher risk.
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.
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are the same.
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 1.25%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Financials sector--about 21.60% of the portfolio. Consumer Discretionary and Industrials round out the top three.
Looking at individual holdings, Olympic Steel Inc (
ZEUS Quick Quote ZEUS - Free Report) accounts for about 1.77% of total assets, followed by Suncoke Energy Inc ( SXC Quick Quote SXC - Free Report) and Kelly Services Inc ( KELYA Quick Quote KELYA - Free Report) .
The top 10 holdings account for about 13.66% of total assets under management.
Performance and Risk
RZV seeks to match the performance of the S&P SmallCap 600 Pure Value Index before fees and expenses. The S&P SmallCap 600 Pure Value Index measures the performance of securities that exhibit strong value characteristics in the S&P SmallCap 600 Index.
The ETF has lost about -16.13% so far this year and is down about -10.16% in the last one year (as of 07/07/2022). In the past 52-week period, it has traded between $81.73 and $105.17.
The ETF has a beta of 1.48 and standard deviation of 36.16% for the trailing three-year period, making it a high risk choice in the space. With about 173 holdings, it effectively diversifies company-specific risk.
Invesco S&P SmallCap 600 Pure Value 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, RZV is a good option for those seeking exposure to the Style Box - Small Cap Value area of the market. Investors might also want to consider some other ETF options in the space.
The iShares Russell 2000 Value ETF (
IWN Quick Quote IWN - Free Report) and the Vanguard SmallCap Value ETF ( VBR Quick Quote VBR - Free Report) track a similar index. While iShares Russell 2000 Value ETF has $11.45 billion in assets, Vanguard SmallCap Value ETF has $21.76 billion. IWN has an expense ratio of 0.24% and VBR 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.