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Should Invesco S&P MidCap 400 Pure Growth ETF (RFG) Be on Your Investing Radar?
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Launched on 03/01/2006, the Invesco S&P MidCap 400 Pure Growth ETF (RFG - Free Report) is a passively managed exchange traded fund designed to provide a broad exposure to the Mid Cap Growth segment of the US equity market.
The fund is sponsored by Invesco. It has amassed assets over $260.90 million, making it one of the average sized ETFs attempting to match the Mid Cap Growth segment of the US equity market.
Why Mid Cap Growth
Compared to large and small cap companies, mid cap businesses tend to have higher growth prospects and are less volatile, respectively, with market capitalization between $2 billion and $10 billion. Thus they have a nice balance of growth potential and stability.
Growth stocks have higher than average sales and earnings growth rates. While these are expected to grow faster than the broader market, they also have higher valuations. Further, growth stocks have a higher level of volatility associated with them. Even though growth stocks are more likely to outperform their value counterparts in strong bull markets, value stocks have a record of delivering better returns in almost all markets than growth stocks.
Costs
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 0.35%, putting it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 0.60%.
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 Healthcare sector--about 20.30% of the portfolio. Consumer Discretionary and Financials round out the top three.
Looking at individual holdings, Shockwave Medical Inc (SWAV - Free Report) accounts for about 7.14% of total assets, followed by Navient Corp (NAVI - Free Report) and Dick's Sporting Goods Inc (DKS - Free Report) .
The top 10 holdings account for about 27.05% of total assets under management.
Performance and Risk
RFG seeks to match the performance of the S&P MidCap 400 Pure Growth Index before fees and expenses. The S&P MidCap 400 Pure Growth Index measures the performance of securities that exhibit strong growth characteristics in the S&P MidCap 400 Index.
The ETF has lost about -21.30% so far this year and is down about -16.89% in the last one year (as of 10/05/2022). In the past 52-week period, it has traded between $159.15 and $245.79.
The ETF has a beta of 1.16 and standard deviation of 31.04% for the trailing three-year period, making it a medium risk choice in the space. With about 93 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco S&P MidCap 400 Pure Growth 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, RFG is a reasonable option for those seeking exposure to the Style Box - Mid Cap Growth area of the market. Investors might also want to consider some other ETF options in the space.
The Vanguard MidCap Growth ETF (VOT - Free Report) and the iShares Russell MidCap Growth ETF (IWP - Free Report) track a similar index. While Vanguard MidCap Growth ETF has $9.47 billion in assets, iShares Russell MidCap Growth ETF has $11.70 billion. VOT has an expense ratio of 0.07% and IWP charges 0.23%.
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 Pure Growth ETF (RFG) Be on Your Investing Radar?
Launched on 03/01/2006, the Invesco S&P MidCap 400 Pure Growth ETF (RFG - Free Report) is a passively managed exchange traded fund designed to provide a broad exposure to the Mid Cap Growth segment of the US equity market.
The fund is sponsored by Invesco. It has amassed assets over $260.90 million, making it one of the average sized ETFs attempting to match the Mid Cap Growth segment of the US equity market.
Why Mid Cap Growth
Compared to large and small cap companies, mid cap businesses tend to have higher growth prospects and are less volatile, respectively, with market capitalization between $2 billion and $10 billion. Thus they have a nice balance of growth potential and stability.
Growth stocks have higher than average sales and earnings growth rates. While these are expected to grow faster than the broader market, they also have higher valuations. Further, growth stocks have a higher level of volatility associated with them. Even though growth stocks are more likely to outperform their value counterparts in strong bull markets, value stocks have a record of delivering better returns in almost all markets than growth stocks.
Costs
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 0.35%, putting it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 0.60%.
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 Healthcare sector--about 20.30% of the portfolio. Consumer Discretionary and Financials round out the top three.
Looking at individual holdings, Shockwave Medical Inc (SWAV - Free Report) accounts for about 7.14% of total assets, followed by Navient Corp (NAVI - Free Report) and Dick's Sporting Goods Inc (DKS - Free Report) .
The top 10 holdings account for about 27.05% of total assets under management.
Performance and Risk
RFG seeks to match the performance of the S&P MidCap 400 Pure Growth Index before fees and expenses. The S&P MidCap 400 Pure Growth Index measures the performance of securities that exhibit strong growth characteristics in the S&P MidCap 400 Index.
The ETF has lost about -21.30% so far this year and is down about -16.89% in the last one year (as of 10/05/2022). In the past 52-week period, it has traded between $159.15 and $245.79.
The ETF has a beta of 1.16 and standard deviation of 31.04% for the trailing three-year period, making it a medium risk choice in the space. With about 93 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco S&P MidCap 400 Pure Growth 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, RFG is a reasonable option for those seeking exposure to the Style Box - Mid Cap Growth area of the market. Investors might also want to consider some other ETF options in the space.
The Vanguard MidCap Growth ETF (VOT - Free Report) and the iShares Russell MidCap Growth ETF (IWP - Free Report) track a similar index. While Vanguard MidCap Growth ETF has $9.47 billion in assets, iShares Russell MidCap Growth ETF has $11.70 billion. VOT has an expense ratio of 0.07% and IWP charges 0.23%.
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.