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Is Invesco S&P MidCap 400 Pure Growth ETF (RFG) a Strong ETF Right Now?
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Launched on 03/01/2006, the Invesco S&P MidCap 400 Pure Growth ETF (RFG - Free Report) is a smart beta exchange traded fund offering broad exposure to the Style Box - Mid Cap Growth category of the market.
What Are Smart Beta ETFs?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.
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.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.
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
Managed by Invesco, RFG has amassed assets over $262.12 million, making it one of the average sized ETFs in the Style Box - Mid Cap Growth. Before fees and expenses, this particular fund seeks to match the performance of the S&P MidCap 400 Pure Growth Index.
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.
Cost & Other Expenses
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
Operating expenses on an annual basis are 0.35% for RFG, making 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
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
RFG's heaviest allocation is in the Healthcare sector, which is about 19.40% of the portfolio. Its Consumer Discretionary and Financials round out the top three.
Taking into account individual holdings, Shockwave Medical Inc (SWAV - Free Report) accounts for about 7.14% of the fund's 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
So far this year, RFG has lost about -21.13%, and is down about -26.12% in the last one year (as of 11/07/2022). During this past 52-week period, the fund has traded between $159.15 and $245.79.
RFG has a beta of 1.17 and standard deviation of 31.39% for the trailing three-year period, which makes the fund 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 is a reasonable option for investors seeking to outperform the Style Box - Mid Cap Growth segment of the market. However, there are other ETFs in the space which investors could consider.
Vanguard MidCap Growth ETF (VOT - Free Report) tracks CRSP U.S. Mid Cap Growth Index and the iShares Russell MidCap Growth ETF (IWP - Free Report) tracks Russell MidCap Growth Index. Vanguard MidCap Growth ETF has $9.10 billion in assets, iShares Russell MidCap Growth ETF has $11.42 billion. VOT has an expense ratio of 0.07% and IWP charges 0.23%.
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 - Mid Cap Growth.
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 MidCap 400 Pure Growth ETF (RFG) a Strong ETF Right Now?
Launched on 03/01/2006, the Invesco S&P MidCap 400 Pure Growth ETF (RFG - Free Report) is a smart beta exchange traded fund offering broad exposure to the Style Box - Mid Cap Growth category of the market.
What Are Smart Beta ETFs?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.
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.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.
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
Managed by Invesco, RFG has amassed assets over $262.12 million, making it one of the average sized ETFs in the Style Box - Mid Cap Growth. Before fees and expenses, this particular fund seeks to match the performance of the S&P MidCap 400 Pure Growth Index.
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.
Cost & Other Expenses
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
Operating expenses on an annual basis are 0.35% for RFG, making 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
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
RFG's heaviest allocation is in the Healthcare sector, which is about 19.40% of the portfolio. Its Consumer Discretionary and Financials round out the top three.
Taking into account individual holdings, Shockwave Medical Inc (SWAV - Free Report) accounts for about 7.14% of the fund's 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
So far this year, RFG has lost about -21.13%, and is down about -26.12% in the last one year (as of 11/07/2022). During this past 52-week period, the fund has traded between $159.15 and $245.79.
RFG has a beta of 1.17 and standard deviation of 31.39% for the trailing three-year period, which makes the fund 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 is a reasonable option for investors seeking to outperform the Style Box - Mid Cap Growth segment of the market. However, there are other ETFs in the space which investors could consider.
Vanguard MidCap Growth ETF (VOT - Free Report) tracks CRSP U.S. Mid Cap Growth Index and the iShares Russell MidCap Growth ETF (IWP - Free Report) tracks Russell MidCap Growth Index. Vanguard MidCap Growth ETF has $9.10 billion in assets, iShares Russell MidCap Growth ETF has $11.42 billion. VOT has an expense ratio of 0.07% and IWP charges 0.23%.
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 - Mid Cap Growth.
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.