Looking for broad exposure to the Mid Cap Value segment of the US equity market? You should consider the Invesco S&P MidCap 400 Revenue ETF (
RWK Quick Quote RWK - Free Report) , a passively managed exchange traded fund launched on 02/22/2008.
The fund is sponsored by Invesco. It has amassed assets over $355.23 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
With market capitalization between $2 billion and $10 billion, mid cap companies usually contain higher growth prospects than large cap companies, and are considered less risky than their small cap counterparts. 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. Value stocks have outperformed growth stocks in nearly all markets when you consider long-term performance, growth stocks are more likely to outpace value stocks in strong bull markets.
Expense ratios are an important factor in the return of an ETF and in the long term, cheaper funds can significantly outperform their more expensive counterparts, other things remaining 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 1.11%.
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 21.30% of the portfolio. Industrials and Information Technology round out the top three.
Looking at individual holdings, Performance Food Group Co (
PFGC Quick Quote PFGC - Free Report) accounts for about 3.05% of total assets, followed by Invesco Government & Agency Portfolio (AGPXX) and Td Synnex Corp ( SNX Quick Quote SNX - Free Report) .
The top 10 holdings account for about 17.55% 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 -5.53% so far this year and is up roughly 2.60% in the last one year (as of 08/22/2022). In the past 52-week period, it has traded between $76.65 and $96.56.
The ETF has a beta of 1.30 and standard deviation of 31.24% for the trailing three-year period, making it a medium risk choice in the space. With about 398 holdings, it effectively diversifies company-specific risk.
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 reasonable 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 Quick Quote IWS - Free Report) and the Vanguard MidCap Value ETF ( VOE Quick Quote VOE - Free Report) track a similar index. While iShares Russell MidCap Value ETF has $13.72 billion in assets, Vanguard MidCap Value ETF has $16.56 billion. IWS has an expense ratio of 0.23% and VOE charges 0.07%. Bottom-Line
While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.
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.