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Should Invesco S&P Ultra Dividend Revenue ETF (RDIV) Be on Your Investing Radar?
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Looking for broad exposure to the Large Cap Value segment of the US equity market? You should consider the Invesco S&P Ultra Dividend Revenue ETF (RDIV - Free Report) , a passively managed exchange traded fund launched on 10/01/2013.
The fund is sponsored by Invesco. It has amassed assets over $1.04 billion, making it one of the average sized ETFs attempting to match the Large Cap Value segment of the US equity market.
Why Large Cap Value
Companies that find themselves in the large cap category typically have a market capitalization above $10 billion. Overall, they are usually a stable option, with less risk and more sure-fire cash flows than mid and small cap companies.
Value stocks are known for their lower than average price-to-earnings and price-to-book ratios, but investors should also note their lower than average sales and earnings growth rates. Considering long-term performance, value stocks have outperformed growth stocks in almost all markets; however, they are more likely to underperform growth stocks in strong bull markets.
Costs
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
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 3.36%.
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.
This ETF has heaviest allocation to the Financials sector--about 24.20% of the portfolio. Energy and Consumer Discretionary round out the top three.
Looking at individual holdings, Best Buy Co Inc (BBY - Free Report) accounts for about 5.98% of total assets, followed by Walgreens Boots Alliance Inc (WBA - Free Report) and Phillips 66 (PSX - Free Report) .
The top 10 holdings account for about 48.38% of total assets under management.
Performance and Risk
RDIV seeks to match the performance of the OFI Revenue Weighted Ultra Dividend Index before fees and expenses. The S&P 900 Dividend Revenue-Weighted Index is constructed using a rules-based methodology that starts with the S&P 900 Index, subject to a maximum 5% per company weighting.
The ETF has gained about 2.39% so far this year and is up about 13.29% in the last one year (as of 02/27/2023). In the past 52-week period, it has traded between $37.70 and $47.80.
The ETF has a beta of 1.10 and standard deviation of 32.30% for the trailing three-year period, making it a medium risk choice in the space. With about 62 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco S&P Ultra Dividend Revenue ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, RDIV is an excellent option for investors seeking exposure to the Style Box - Large Cap Value segment of the market. There are other additional ETFs in the space that investors could consider as well.
The iShares Russell 1000 Value ETF (IWD - Free Report) and the Vanguard Value ETF (VTV - Free Report) track a similar index. While iShares Russell 1000 Value ETF has $51.94 billion in assets, Vanguard Value ETF has $101.89 billion. IWD has an expense ratio of 0.18% and VTV charges 0.04%.
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.
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Should Invesco S&P Ultra Dividend Revenue ETF (RDIV) Be on Your Investing Radar?
Looking for broad exposure to the Large Cap Value segment of the US equity market? You should consider the Invesco S&P Ultra Dividend Revenue ETF (RDIV - Free Report) , a passively managed exchange traded fund launched on 10/01/2013.
The fund is sponsored by Invesco. It has amassed assets over $1.04 billion, making it one of the average sized ETFs attempting to match the Large Cap Value segment of the US equity market.
Why Large Cap Value
Companies that find themselves in the large cap category typically have a market capitalization above $10 billion. Overall, they are usually a stable option, with less risk and more sure-fire cash flows than mid and small cap companies.
Value stocks are known for their lower than average price-to-earnings and price-to-book ratios, but investors should also note their lower than average sales and earnings growth rates. Considering long-term performance, value stocks have outperformed growth stocks in almost all markets; however, they are more likely to underperform growth stocks in strong bull markets.
Costs
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
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 3.36%.
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.
This ETF has heaviest allocation to the Financials sector--about 24.20% of the portfolio. Energy and Consumer Discretionary round out the top three.
Looking at individual holdings, Best Buy Co Inc (BBY - Free Report) accounts for about 5.98% of total assets, followed by Walgreens Boots Alliance Inc (WBA - Free Report) and Phillips 66 (PSX - Free Report) .
The top 10 holdings account for about 48.38% of total assets under management.
Performance and Risk
RDIV seeks to match the performance of the OFI Revenue Weighted Ultra Dividend Index before fees and expenses. The S&P 900 Dividend Revenue-Weighted Index is constructed using a rules-based methodology that starts with the S&P 900 Index, subject to a maximum 5% per company weighting.
The ETF has gained about 2.39% so far this year and is up about 13.29% in the last one year (as of 02/27/2023). In the past 52-week period, it has traded between $37.70 and $47.80.
The ETF has a beta of 1.10 and standard deviation of 32.30% for the trailing three-year period, making it a medium risk choice in the space. With about 62 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco S&P Ultra Dividend Revenue ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, RDIV is an excellent option for investors seeking exposure to the Style Box - Large Cap Value segment of the market. There are other additional ETFs in the space that investors could consider as well.
The iShares Russell 1000 Value ETF (IWD - Free Report) and the Vanguard Value ETF (VTV - Free Report) track a similar index. While iShares Russell 1000 Value ETF has $51.94 billion in assets, Vanguard Value ETF has $101.89 billion. IWD has an expense ratio of 0.18% and VTV charges 0.04%.
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.