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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 $625.35 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.
Carrying lower than average price-to-earnings and price-to-book ratios, value stocks also have 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
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 1.46%.
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 Consumer Discretionary sector--about 23.50% of the portfolio. Industrials and Financials round out the top three.
Looking at individual holdings, Par Pacific Holdings Inc (PARR - Free Report) accounts for about 2.09% of total assets, followed by Vital Energy Inc (VTLE - Free Report) and Consol Energy Inc (CEIX - Free Report) .
The top 10 holdings account for about 15.83% 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 added roughly 8.75% so far this year and is up about 0.99% in the last one year (as of 11/16/2023). In the past 52-week period, it has traded between $42.07 and $52.31.
The ETF has a beta of 1.26 and standard deviation of 26.34% for the trailing three-year period. With about 114 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco S&P SmallCap Value with Momentum 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, XSVM is a sufficient option for those seeking exposure to the Style Box - Small Cap Value area of the market. Investors might also want to consider some other ETF options in the space.
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 $10.75 billion in assets, Vanguard Small-Cap Value ETF has $24.45 billion. IWN has an expense ratio of 0.24% and VBR charges 0.07%.
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.
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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 $625.35 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.
Carrying lower than average price-to-earnings and price-to-book ratios, value stocks also have 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
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 1.46%.
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 Consumer Discretionary sector--about 23.50% of the portfolio. Industrials and Financials round out the top three.
Looking at individual holdings, Par Pacific Holdings Inc (PARR - Free Report) accounts for about 2.09% of total assets, followed by Vital Energy Inc (VTLE - Free Report) and Consol Energy Inc (CEIX - Free Report) .
The top 10 holdings account for about 15.83% 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 added roughly 8.75% so far this year and is up about 0.99% in the last one year (as of 11/16/2023). In the past 52-week period, it has traded between $42.07 and $52.31.
The ETF has a beta of 1.26 and standard deviation of 26.34% for the trailing three-year period. With about 114 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco S&P SmallCap Value with Momentum 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, XSVM is a sufficient option for those seeking exposure to the Style Box - Small Cap Value area of the market. Investors might also want to consider some other ETF options in the space.
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 $10.75 billion in assets, Vanguard Small-Cap Value ETF has $24.45 billion. IWN has an expense ratio of 0.24% and VBR charges 0.07%.
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.