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Is Invesco S&P MidCap 400 Pure Growth ETF (RFG) a Strong ETF Right Now?
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The Invesco S&P MidCap 400 Pure Growth ETF (RFG - Free Report) made its debut on 03/01/2006, and is a smart beta exchange traded fund that provides broad exposure to the Style Box - Mid Cap Growth category of the market.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
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.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
The fund is managed by Invesco, and has been able to amass over $241.53 million, which makes 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
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 this ETF, which makes it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 0.98%.
Sector Exposure and Top Holdings
ETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
RFG's heaviest allocation is in the Industrials sector, which is about 18.80% of the portfolio. Its Energy and Healthcare round out the top three.
Looking at individual holdings, Pbf Energy Inc (PBF - Free Report) accounts for about 3.10% of total assets, followed by Pdc Energy Inc and Builders Firstsource Inc (BLDR - Free Report) .
Its top 10 holdings account for approximately 22.63% of RFG's total assets under management.
Performance and Risk
So far this year, RFG has added roughly 1.46%, and is up about 2.90% in the last one year (as of 05/17/2023). During this past 52-week period, the fund has traded between $159.15 and $199.97.
The fund has a beta of 1.17 and standard deviation of 25.37% for the trailing three-year period, which makes RFG a medium risk choice in this particular space. With about 79 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 Mid-Cap Growth ETF (VOT - Free Report) tracks CRSP U.S. Mid Cap Growth Index and the iShares Russell Mid-Cap Growth ETF (IWP - Free Report) tracks Russell MidCap Growth Index. Vanguard Mid-Cap Growth ETF has $9.76 billion in assets, iShares Russell Mid-Cap Growth ETF has $11.87 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?
The Invesco S&P MidCap 400 Pure Growth ETF (RFG - Free Report) made its debut on 03/01/2006, and is a smart beta exchange traded fund that provides broad exposure to the Style Box - Mid Cap Growth category of the market.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
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.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
The fund is managed by Invesco, and has been able to amass over $241.53 million, which makes 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
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 this ETF, which makes it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 0.98%.
Sector Exposure and Top Holdings
ETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
RFG's heaviest allocation is in the Industrials sector, which is about 18.80% of the portfolio. Its Energy and Healthcare round out the top three.
Looking at individual holdings, Pbf Energy Inc (PBF - Free Report) accounts for about 3.10% of total assets, followed by Pdc Energy Inc and Builders Firstsource Inc (BLDR - Free Report) .
Its top 10 holdings account for approximately 22.63% of RFG's total assets under management.
Performance and Risk
So far this year, RFG has added roughly 1.46%, and is up about 2.90% in the last one year (as of 05/17/2023). During this past 52-week period, the fund has traded between $159.15 and $199.97.
The fund has a beta of 1.17 and standard deviation of 25.37% for the trailing three-year period, which makes RFG a medium risk choice in this particular space. With about 79 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 Mid-Cap Growth ETF (VOT - Free Report) tracks CRSP U.S. Mid Cap Growth Index and the iShares Russell Mid-Cap Growth ETF (IWP - Free Report) tracks Russell MidCap Growth Index. Vanguard Mid-Cap Growth ETF has $9.76 billion in assets, iShares Russell Mid-Cap Growth ETF has $11.87 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.