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Is Invesco S&P MidCap 400 Pure Growth ETF (RFG) a Strong ETF Right Now?
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A smart beta exchange traded fund, the Invesco S&P MidCap 400 Pure Growth ETF (RFG - Free Report) debuted on 03/01/2006, and offers broad exposure to the Style Box - Mid Cap Growth category of the market.
What Are Smart Beta ETFs?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
Managed by Invesco, RFG has amassed assets over $247.49 million, making it one of the average sized ETFs in the Style Box - Mid Cap Growth. Before fees and expenses, this particular fund 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 RFG, making it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 0.95%.
Sector Exposure and Top Holdings
Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.
For RFG, it has heaviest allocation in the Energy sector --about 22.40% of the portfolio --while Industrials and Financials round out the top three.
When you look at individual holdings, Pbf Energy Inc (PBF - Free Report) accounts for about 2.92% of the fund's total assets, followed by Builders Firstsource Inc (BLDR - Free Report) and Kinsale Capital Group Inc (KNSL - Free Report) .
Its top 10 holdings account for approximately 24.54% of RFG's total assets under management.
Performance and Risk
The ETF has added roughly 10.77% and was up about 3.27% so far this year and in the past one year (as of 11/28/2023), respectively. RFG has traded between $34.48 and $41.22 during this last 52-week period.
The ETF has a beta of 1.16 and standard deviation of 24.06% for the trailing three-year period, making it a medium risk choice in the space. With about 85 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco S&P MidCap 400 Pure Growth ETF is an excellent option for investors seeking to outperform the Style Box - Mid Cap Growth segment of the market. There are other ETFs in the space which investors could consider as well.
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 $10.84 billion in assets, iShares Russell Mid-Cap Growth ETF has $13.12 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?
A smart beta exchange traded fund, the Invesco S&P MidCap 400 Pure Growth ETF (RFG - Free Report) debuted on 03/01/2006, and offers broad exposure to the Style Box - Mid Cap Growth category of the market.
What Are Smart Beta ETFs?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
Managed by Invesco, RFG has amassed assets over $247.49 million, making it one of the average sized ETFs in the Style Box - Mid Cap Growth. Before fees and expenses, this particular fund 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 RFG, making it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 0.95%.
Sector Exposure and Top Holdings
Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.
For RFG, it has heaviest allocation in the Energy sector --about 22.40% of the portfolio --while Industrials and Financials round out the top three.
When you look at individual holdings, Pbf Energy Inc (PBF - Free Report) accounts for about 2.92% of the fund's total assets, followed by Builders Firstsource Inc (BLDR - Free Report) and Kinsale Capital Group Inc (KNSL - Free Report) .
Its top 10 holdings account for approximately 24.54% of RFG's total assets under management.
Performance and Risk
The ETF has added roughly 10.77% and was up about 3.27% so far this year and in the past one year (as of 11/28/2023), respectively. RFG has traded between $34.48 and $41.22 during this last 52-week period.
The ETF has a beta of 1.16 and standard deviation of 24.06% for the trailing three-year period, making it a medium risk choice in the space. With about 85 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco S&P MidCap 400 Pure Growth ETF is an excellent option for investors seeking to outperform the Style Box - Mid Cap Growth segment of the market. There are other ETFs in the space which investors could consider as well.
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 $10.84 billion in assets, iShares Russell Mid-Cap Growth ETF has $13.12 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.