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Is Invesco S&P MidCap 400 Pure Growth ETF (RFG) a Strong ETF Right Now?
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Designed to provide broad exposure to the Style Box - Mid Cap Growth category of the market, the Invesco S&P MidCap 400 Pure Growth ETF (RFG - Free Report) is a smart beta exchange traded fund launched on 03/01/2006.
What Are Smart Beta ETFs?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the 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.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
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.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
Managed by Invesco, RFG has amassed assets over $257.36 million, making it one of the average sized ETFs in the Style Box - Mid Cap Growth. Before fees and expenses, RFG 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
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.
Operating expenses on an annual basis are 0.35% for this ETF, which makes it on par with most peer products in the space.
RFG's 12-month trailing dividend yield is 0.77%.
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.
For RFG, it has heaviest allocation in the Consumer Discretionary sector --about 18.70% of the portfolio --while Healthcare and Financials round out the top three.
When you look at 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) .
RFG's top 10 holdings account for about 27.05% of its total assets under management.
Performance and Risk
The ETF has added about 1.20% so far this year and is down about -18.45% in the last one year (as of 01/09/2023). In the past 52-week period, it has traded between $159.15 and $221.30.
The ETF has a beta of 1.16 and standard deviation of 32.02% 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 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 $9.40 billion in assets, iShares Russell MidCap Growth ETF has $11.89 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?
Designed to provide broad exposure to the Style Box - Mid Cap Growth category of the market, the Invesco S&P MidCap 400 Pure Growth ETF (RFG - Free Report) is a smart beta exchange traded fund launched on 03/01/2006.
What Are Smart Beta ETFs?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the 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.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
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.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
Managed by Invesco, RFG has amassed assets over $257.36 million, making it one of the average sized ETFs in the Style Box - Mid Cap Growth. Before fees and expenses, RFG 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
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.
Operating expenses on an annual basis are 0.35% for this ETF, which makes it on par with most peer products in the space.
RFG's 12-month trailing dividend yield is 0.77%.
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.
For RFG, it has heaviest allocation in the Consumer Discretionary sector --about 18.70% of the portfolio --while Healthcare and Financials round out the top three.
When you look at 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) .
RFG's top 10 holdings account for about 27.05% of its total assets under management.
Performance and Risk
The ETF has added about 1.20% so far this year and is down about -18.45% in the last one year (as of 01/09/2023). In the past 52-week period, it has traded between $159.15 and $221.30.
The ETF has a beta of 1.16 and standard deviation of 32.02% 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 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 $9.40 billion in assets, iShares Russell MidCap Growth ETF has $11.89 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.