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Should Invesco S&P SmallCap Value with Momentum ETF (XSVM) Be on Your Investing Radar?
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Designed to provide broad exposure to the Small Cap Value segment of the US equity market, the Invesco S&P SmallCap Value with Momentum ETF (XSVM - Free Report) is a passively managed exchange traded fund launched on 03/03/2005.
The fund is sponsored by Invesco. It has amassed assets over $606.65 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
There's a lot of potential to investing in small cap companies, but with market capitalization below $2 billion, that high potential comes with even higher risk.
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. While value stocks have outperformed growth stocks in nearly all markets when you consider long-term performance, growth stocks are more likely to outpace value 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 0.36%, putting it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.53%.
Sector Exposure and Top Holdings
ETFs offer a 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.
This ETF has heaviest allocation to the Industrials sector--about 25.50% 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 return is roughly 2.08% so far this year and it's up approximately 5.11% in the last one year (as of 07/10/2023). In the past 52-week period, it has traded between $41.20 and $52.31.
The ETF has a beta of 1.25 and standard deviation of 27.95% 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 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, XSVM is an outstanding 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 $11.23 billion in assets, Vanguard Small-Cap Value ETF has $24.65 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?
Designed to provide broad exposure to the Small Cap Value segment of the US equity market, the Invesco S&P SmallCap Value with Momentum ETF (XSVM - Free Report) is a passively managed exchange traded fund launched on 03/03/2005.
The fund is sponsored by Invesco. It has amassed assets over $606.65 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
There's a lot of potential to investing in small cap companies, but with market capitalization below $2 billion, that high potential comes with even higher risk.
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. While value stocks have outperformed growth stocks in nearly all markets when you consider long-term performance, growth stocks are more likely to outpace value 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 0.36%, putting it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.53%.
Sector Exposure and Top Holdings
ETFs offer a 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.
This ETF has heaviest allocation to the Industrials sector--about 25.50% 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 return is roughly 2.08% so far this year and it's up approximately 5.11% in the last one year (as of 07/10/2023). In the past 52-week period, it has traded between $41.20 and $52.31.
The ETF has a beta of 1.25 and standard deviation of 27.95% 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 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, XSVM is an outstanding 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 $11.23 billion in assets, Vanguard Small-Cap Value ETF has $24.65 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.