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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.
A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.
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 $251.46 million, which makes it one of the average sized ETFs in the Style Box - Mid Cap Growth. RFG, before fees and expenses, 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
For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.
Annual operating expenses for RFG are 0.35%, which makes it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 0.96%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Energy sector - about 19.90% of the portfolio. Industrials and Financials round out the top three.
Looking at individual holdings, Builders Firstsource Inc (BLDR - Free Report) accounts for about 3.24% of total assets, followed by Pbf Energy Inc (PBF - Free Report) and Celsius Holdings Inc (CELH - Free Report) .
Its top 10 holdings account for approximately 25.36% of RFG's total assets under management.
Performance and Risk
Year-to-date, the Invesco S&P MidCap 400 Pure Growth ETF has added roughly 8.99% so far, and was up about 20.66% over the last 12 months (as of 09/27/2023). RFG has traded between $33.37 and $41.22 in this past 52-week period.
The fund has a beta of 1.18 and standard deviation of 24.17% for the trailing three-year period, which makes RFG a medium risk choice in this particular space. With about 80 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 $10.23 billion in assets, iShares Russell Mid-Cap Growth ETF has $12.24 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.
A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.
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 $251.46 million, which makes it one of the average sized ETFs in the Style Box - Mid Cap Growth. RFG, before fees and expenses, 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
For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.
Annual operating expenses for RFG are 0.35%, which makes it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 0.96%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Energy sector - about 19.90% of the portfolio. Industrials and Financials round out the top three.
Looking at individual holdings, Builders Firstsource Inc (BLDR - Free Report) accounts for about 3.24% of total assets, followed by Pbf Energy Inc (PBF - Free Report) and Celsius Holdings Inc (CELH - Free Report) .
Its top 10 holdings account for approximately 25.36% of RFG's total assets under management.
Performance and Risk
Year-to-date, the Invesco S&P MidCap 400 Pure Growth ETF has added roughly 8.99% so far, and was up about 20.66% over the last 12 months (as of 09/27/2023). RFG has traded between $33.37 and $41.22 in this past 52-week period.
The fund has a beta of 1.18 and standard deviation of 24.17% for the trailing three-year period, which makes RFG a medium risk choice in this particular space. With about 80 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 $10.23 billion in assets, iShares Russell Mid-Cap Growth ETF has $12.24 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.