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Is Invesco S&P 500 Pure Value ETF (RPV) a Strong ETF Right Now?
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A smart beta exchange traded fund, the Invesco S&P 500 Pure Value ETF (RPV - Free Report) debuted on 03/01/2006, and offers broad exposure to the Style Box - Large Cap Value category of the market.
What Are Smart Beta ETFs?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
The fund is managed by Invesco, and has been able to amass over $3.36 billion, which makes it one of the average sized ETFs in the Style Box - Large Cap Value. Before fees and expenses, this particular fund seeks to match the performance of the S&P 500 Pure Value Index.
The S&P 500 Pure Value Index measures the performance of securities that exhibit strong value characteristics in the S&P 500 Index.
Cost & Other Expenses
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 0.35%, making it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 2.11%.
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.
Representing 30.60% of the portfolio, the fund has heaviest allocation to the Financials sector; Healthcare and Consumer Staples round out the top three.
When you look at individual holdings, Berkshire Hathaway Inc (BRK/B) accounts for about 2.27% of the fund's total assets, followed by Cigna Corp (CI - Free Report) and Prudential Financial Inc (PRU - Free Report) .
Its top 10 holdings account for approximately 17.96% of RPV's total assets under management.
Performance and Risk
Year-to-date, the Invesco S&P 500 Pure Value ETF has lost about -7.37% so far, and is down about -0.25% over the last 12 months (as of 07/13/2022). RPV has traded between $72.23 and $88.24 in this past 52-week period.
The fund has a beta of 1.21 and standard deviation of 31.81% for the trailing three-year period, which makes RPV a medium risk choice in this particular space. With about 124 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco S&P 500 Pure Value ETF is a reasonable option for investors seeking to outperform the Style Box - Large Cap Value segment of the market. However, there are other ETFs in the space which investors could consider.
IShares Russell 1000 Value ETF (IWD - Free Report) tracks Russell 1000 Value Index and the Vanguard Value ETF (VTV - Free Report) tracks CRSP U.S. Large Cap Value Index. IShares Russell 1000 Value ETF has $51.02 billion in assets, Vanguard Value ETF has $93.40 billion. IWD has an expense ratio of 0.19% and VTV charges 0.04%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - Large Cap Value.
Bottom Line
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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Is Invesco S&P 500 Pure Value ETF (RPV) a Strong ETF Right Now?
A smart beta exchange traded fund, the Invesco S&P 500 Pure Value ETF (RPV - Free Report) debuted on 03/01/2006, and offers broad exposure to the Style Box - Large Cap Value category of the market.
What Are Smart Beta ETFs?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
The fund is managed by Invesco, and has been able to amass over $3.36 billion, which makes it one of the average sized ETFs in the Style Box - Large Cap Value. Before fees and expenses, this particular fund seeks to match the performance of the S&P 500 Pure Value Index.
The S&P 500 Pure Value Index measures the performance of securities that exhibit strong value characteristics in the S&P 500 Index.
Cost & Other Expenses
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 0.35%, making it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 2.11%.
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.
Representing 30.60% of the portfolio, the fund has heaviest allocation to the Financials sector; Healthcare and Consumer Staples round out the top three.
When you look at individual holdings, Berkshire Hathaway Inc (BRK/B) accounts for about 2.27% of the fund's total assets, followed by Cigna Corp (CI - Free Report) and Prudential Financial Inc (PRU - Free Report) .
Its top 10 holdings account for approximately 17.96% of RPV's total assets under management.
Performance and Risk
Year-to-date, the Invesco S&P 500 Pure Value ETF has lost about -7.37% so far, and is down about -0.25% over the last 12 months (as of 07/13/2022). RPV has traded between $72.23 and $88.24 in this past 52-week period.
The fund has a beta of 1.21 and standard deviation of 31.81% for the trailing three-year period, which makes RPV a medium risk choice in this particular space. With about 124 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco S&P 500 Pure Value ETF is a reasonable option for investors seeking to outperform the Style Box - Large Cap Value segment of the market. However, there are other ETFs in the space which investors could consider.
IShares Russell 1000 Value ETF (IWD - Free Report) tracks Russell 1000 Value Index and the Vanguard Value ETF (VTV - Free Report) tracks CRSP U.S. Large Cap Value Index. IShares Russell 1000 Value ETF has $51.02 billion in assets, Vanguard Value ETF has $93.40 billion. IWD has an expense ratio of 0.19% and VTV charges 0.04%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - Large Cap Value.
Bottom Line
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.