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Is Invesco S&P SmallCap 600 Pure Value ETF (RZV) a Strong ETF Right Now?
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The Invesco S&P SmallCap 600 Pure Value ETF (RZV - 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 - Small Cap Value 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.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
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.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
The fund is managed by Invesco, and has been able to amass over $249.39 million, which makes it one of the average sized ETFs in the Style Box - Small Cap Value. This particular fund seeks to match the performance of the S&P SmallCap 600 Pure Value Index before fees and expenses.
The S&P SmallCap 600 Pure Value Index measures the performance of securities that exhibit strong value characteristics in the S&P SmallCap 600 Index.
Cost & Other Expenses
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 cousins, other things remaining the same.
Annual operating expenses for this ETF are 0.35%, making it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 1.19%.
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.
RZV's heaviest allocation is in the Consumer Discretionary sector, which is about 19.90% of the portfolio. Its Financials and Industrials round out the top three.
Taking into account individual holdings, Dish Network Corp (DISH) accounts for about 1.83% of the fund's total assets, followed by Xerox Holdings Corp (XRX - Free Report) and Jetblue Airways Corp (JBLU - Free Report) .
The top 10 holdings account for about 15.94% of total assets under management.
Performance and Risk
Year-to-date, the Invesco S&P SmallCap 600 Pure Value ETF has lost about -5.48% so far, and is up about 0.85% over the last 12 months (as of 02/01/2024). RZV has traded between $83.38 and $108.67 in this past 52-week period.
RZV has a beta of 1.49 and standard deviation of 25.46% for the trailing three-year period, which makes the fund a high risk choice in the space. With about 143 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco S&P SmallCap 600 Pure Value ETF is a reasonable option for investors seeking to outperform the Style Box - Small Cap Value segment of the market. However, there are other ETFs in the space which investors could consider.
IShares Russell 2000 Value ETF (IWN - Free Report) tracks Russell 2000 Value Index and the Vanguard Small-Cap Value ETF (VBR - Free Report) tracks CRSP U.S. Small Cap Value Index. IShares Russell 2000 Value ETF has $11.77 billion in assets, Vanguard Small-Cap Value ETF has $26.36 billion. IWN has an expense ratio of 0.24% and VBR charges 0.07%.
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 - Small Cap Value.
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 SmallCap 600 Pure Value ETF (RZV) a Strong ETF Right Now?
The Invesco S&P SmallCap 600 Pure Value ETF (RZV - 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 - Small Cap Value 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.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
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.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
The fund is managed by Invesco, and has been able to amass over $249.39 million, which makes it one of the average sized ETFs in the Style Box - Small Cap Value. This particular fund seeks to match the performance of the S&P SmallCap 600 Pure Value Index before fees and expenses.
The S&P SmallCap 600 Pure Value Index measures the performance of securities that exhibit strong value characteristics in the S&P SmallCap 600 Index.
Cost & Other Expenses
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 cousins, other things remaining the same.
Annual operating expenses for this ETF are 0.35%, making it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 1.19%.
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.
RZV's heaviest allocation is in the Consumer Discretionary sector, which is about 19.90% of the portfolio. Its Financials and Industrials round out the top three.
Taking into account individual holdings, Dish Network Corp (DISH) accounts for about 1.83% of the fund's total assets, followed by Xerox Holdings Corp (XRX - Free Report) and Jetblue Airways Corp (JBLU - Free Report) .
The top 10 holdings account for about 15.94% of total assets under management.
Performance and Risk
Year-to-date, the Invesco S&P SmallCap 600 Pure Value ETF has lost about -5.48% so far, and is up about 0.85% over the last 12 months (as of 02/01/2024). RZV has traded between $83.38 and $108.67 in this past 52-week period.
RZV has a beta of 1.49 and standard deviation of 25.46% for the trailing three-year period, which makes the fund a high risk choice in the space. With about 143 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco S&P SmallCap 600 Pure Value ETF is a reasonable option for investors seeking to outperform the Style Box - Small Cap Value segment of the market. However, there are other ETFs in the space which investors could consider.
IShares Russell 2000 Value ETF (IWN - Free Report) tracks Russell 2000 Value Index and the Vanguard Small-Cap Value ETF (VBR - Free Report) tracks CRSP U.S. Small Cap Value Index. IShares Russell 2000 Value ETF has $11.77 billion in assets, Vanguard Small-Cap Value ETF has $26.36 billion. IWN has an expense ratio of 0.24% and VBR charges 0.07%.
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 - Small Cap Value.
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.