Launched on 03/01/2006, the Invesco S&P 500 Pure Value ETF (RPV Quick QuoteRPV - Free Report) is a passively managed exchange traded fund designed to provide a broad exposure to the Large Cap Value segment of the US equity market.

The fund is sponsored by Invesco. It has amassed assets over $2.13 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. Considered a more stable option, large cap companies boast more predictable cash flows and are less volatile than their mid and small cap counterparts.

Carrying lower than average price-to-earnings and price-to-book ratios, value stocks also have lower than average sales and earnings growth rates. Looking at their long-term performance, value stocks have outperformed growth stocks in almost all markets. They are however likely to underperform growth stocks in strong bull markets.

Costs

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.

Annual operating expenses for this ETF are 0.35%, putting it on par with most peer products in the space.

It has a 12-month trailing dividend yield of 2.57%.

Sector Exposure and Top Holdings

Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. 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 22.10% of the portfolio. Consumer Discretionary and Telecom round out the top three.

Looking at individual holdings, Paramount Global (PARA Quick QuotePARA - Free Report) accounts for about 3.86% of total assets, followed by Warner Bros Discovery Inc (WBD Quick QuoteWBD - Free Report) and General Motors Co (GM Quick QuoteGM - Free Report) .

The top 10 holdings account for about 24.1% of total assets under management.

Performance and Risk

RPV seeks to match the performance of the S&P 500 Pure Value Index before fees and expenses. The S&P 500 Pure Value Index measures the performance of securities that exhibit strong value characteristics in the S&P 500 Index.

The ETF has added roughly 3.78% so far this year and it's up approximately 7.49% in the last one year (as of 07/24/2023). In the past 52-week period, it has traded between $69.84 and $89.43.

The ETF has a beta of 1.18 and standard deviation of 21.59% for the trailing three-year period, making it a medium risk choice in the space. With about 83 holdings, it effectively diversifies company-specific risk.

Alternatives

Invesco S&P 500 Pure Value ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, RPV is a reasonable option for those seeking exposure to the Style Box - Large Cap Value area of the market. Investors might also want to consider some other ETF options in the space.

The iShares Russell 1000 Value ETF (IWD Quick QuoteIWD - Free Report) and the Vanguard Value ETF (VTV Quick QuoteVTV - Free Report) track a similar index. While iShares Russell 1000 Value ETF has $52.06 billion in assets, Vanguard Value ETF has $102.54 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.