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Should Invesco S&P SmallCap Value with Momentum ETF (XSVM) Be on Your Investing Radar?
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Looking for broad exposure to the Small Cap Value segment of the US equity market? You should consider the Invesco S&P SmallCap Value with Momentum ETF (XSVM - Free Report) , a passively managed exchange traded fund launched on 03/03/2005.
The fund is sponsored by Invesco. It has amassed assets over $587.85 million, making it one of the average sized ETFs attempting to match the Small Cap Value segment of the US equity market.
Why Small Cap Value
Small cap companies have market capitalization below $2 billion. They usually have higher potential than large and mid cap companies with stocks but higher risk.
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. 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
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 0.36%, putting it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.70%.
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 Industrials sector--about 23.90% of the portfolio. Consumer Discretionary and Financials round out the top three.
Looking at individual holdings, Olympic Steel Inc (ZEUS - Free Report) accounts for about 2.85% of total assets, followed by Kelly Services Inc (KELYA - Free Report) and Par Pacific Holdings Inc (PARR - Free Report) .
The top 10 holdings account for about 17.62% of total assets under management.
Performance and Risk
XSVM seeks to match the performance of the S&P 600 HIGH MOMENTUM VALUE INDEX before fees and expenses. The S&P 600 High Momentum Value Index is composed of securities with strong value characteristics selected from the Russell 2000 Index.
The ETF has lost about -5.86% so far this year and is down about -11.08% in the last one year (as of 05/10/2023). In the past 52-week period, it has traded between $41.20 and $52.76.
The ETF has a beta of 1.25 and standard deviation of 29.99% for the trailing three-year period. With about 117 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco S&P SmallCap Value with Momentum ETF holds a Zacks ETF Rank of 1 (Strong Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, XSVM is an excellent option for investors seeking exposure to the Style Box - Small Cap Value segment of the market. There are other additional ETFs in the space that investors could consider as well.
The iShares Russell 2000 Value ETF (IWN - Free Report) and the Vanguard Small-Cap Value ETF (VBR - Free Report) track a similar index. While iShares Russell 2000 Value ETF has $10.62 billion in assets, Vanguard Small-Cap Value ETF has $23.07 billion. IWN has an expense ratio of 0.23% and VBR charges 0.07%.
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 SmallCap Value with Momentum ETF (XSVM) Be on Your Investing Radar?
Looking for broad exposure to the Small Cap Value segment of the US equity market? You should consider the Invesco S&P SmallCap Value with Momentum ETF (XSVM - Free Report) , a passively managed exchange traded fund launched on 03/03/2005.
The fund is sponsored by Invesco. It has amassed assets over $587.85 million, making it one of the average sized ETFs attempting to match the Small Cap Value segment of the US equity market.
Why Small Cap Value
Small cap companies have market capitalization below $2 billion. They usually have higher potential than large and mid cap companies with stocks but higher risk.
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. 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
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 0.36%, putting it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.70%.
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 Industrials sector--about 23.90% of the portfolio. Consumer Discretionary and Financials round out the top three.
Looking at individual holdings, Olympic Steel Inc (ZEUS - Free Report) accounts for about 2.85% of total assets, followed by Kelly Services Inc (KELYA - Free Report) and Par Pacific Holdings Inc (PARR - Free Report) .
The top 10 holdings account for about 17.62% of total assets under management.
Performance and Risk
XSVM seeks to match the performance of the S&P 600 HIGH MOMENTUM VALUE INDEX before fees and expenses. The S&P 600 High Momentum Value Index is composed of securities with strong value characteristics selected from the Russell 2000 Index.
The ETF has lost about -5.86% so far this year and is down about -11.08% in the last one year (as of 05/10/2023). In the past 52-week period, it has traded between $41.20 and $52.76.
The ETF has a beta of 1.25 and standard deviation of 29.99% for the trailing three-year period. With about 117 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco S&P SmallCap Value with Momentum ETF holds a Zacks ETF Rank of 1 (Strong Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, XSVM is an excellent option for investors seeking exposure to the Style Box - Small Cap Value segment of the market. There are other additional ETFs in the space that investors could consider as well.
The iShares Russell 2000 Value ETF (IWN - Free Report) and the Vanguard Small-Cap Value ETF (VBR - Free Report) track a similar index. While iShares Russell 2000 Value ETF has $10.62 billion in assets, Vanguard Small-Cap Value ETF has $23.07 billion. IWN has an expense ratio of 0.23% and VBR charges 0.07%.
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.