If you're interested in broad exposure to the Small Cap Blend segment of the US equity market, look no further than the Invesco S&P SmallCap 600 Revenue ETF (
RWJ Quick Quote RWJ - Free Report) , a passively managed exchange traded fund launched on 02/22/2008.
The fund is sponsored by Invesco. It has amassed assets over $873.96 million, making it one of the average sized ETFs attempting to match the Small Cap Blend segment of the US equity market.
Why Small Cap Blend
There's a lot of potential to investing in small cap companies, but with market capitalization below $2 billion, that high potential comes with even higher risk.
Blend ETFs usually hold a mix of growth and value stocks as well as stocks that exhibit both value and growth characteristics.
When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.
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 0.76%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Industrials sector--about 19.10% of the portfolio. Consumer Discretionary and Energy round out the top three.
Looking at individual holdings, World Fuel Services Corp (
INT Quick Quote INT - Free Report) accounts for about 3.07% of total assets, followed by United Natural Foods Inc ( UNFI Quick Quote UNFI - Free Report) and Pbf Energy Inc ( PBF Quick Quote PBF - Free Report) .
The top 10 holdings account for about 16.44% of total assets under management.
Performance and Risk
RWJ seeks to match the performance of the OFI Revenue Weighted Small Cap Index before fees and expenses. The S&P SmallCap 600 Revenue-Weighted Index is constructed using a rules-based methodology that re-weights the constituent securities of the S&P SmallCap 600 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 -3.57% so far this year and is up about 2.50% in the last one year (as of 08/15/2022). In the past 52-week period, it has traded between $101.01 and $130.08.
The ETF has a beta of 1.31 and standard deviation of 35.31% for the trailing three-year period, making it a high risk choice in the space. With about 601 holdings, it effectively diversifies company-specific risk.
Invesco S&P SmallCap 600 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, RWJ is a good option for those seeking exposure to the Style Box - Small Cap Blend area of the market. Investors might also want to consider some other ETF options in the space.
The iShares Russell 2000 ETF (
IWM Quick Quote IWM - Free Report) and the iShares Core S&P SmallCap ETF ( IJR Quick Quote IJR - Free Report) track a similar index. While iShares Russell 2000 ETF has $57.96 billion in assets, iShares Core S&P SmallCap ETF has $71.22 billion. IWM has an expense ratio of 0.19% and IJR charges 0.06%. 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.