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Is Invesco S&P MidCap 400 Pure Value ETF (RFV) a Strong ETF Right Now?
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Designed to provide broad exposure to the Style Box - Mid Cap Value category of the market, the Invesco S&P MidCap 400 Pure Value ETF (RFV - Free Report) is a smart beta exchange traded fund launched on 03/01/2006.
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.
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
The fund is sponsored by Invesco. It has amassed assets over $320.45 million, making it one of the average sized ETFs in the Style Box - Mid Cap Value. RFV seeks to match the performance of the S&P MidCap 400 Pure Value Index before fees and expenses.
The S&P MidCap 400 Pure Value Index measures the performance of securities that exhibit strong value characteristics in the S&P MidCap 400 Index.
Cost & Other Expenses
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.
Operating expenses on an annual basis are 0.35% for this ETF, which makes it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 1.30%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
Representing 25.60% of the portfolio, the fund has heaviest allocation to the Consumer Discretionary sector; Financials and Industrials round out the top three.
When you look at individual holdings, Macy's Inc (M - Free Report) accounts for about 2.72% of the fund's total assets, followed by Pbf Energy Inc (PBF - Free Report) and United States Steel Corp (X - Free Report) .
RFV's top 10 holdings account for about 24.03% of its total assets under management.
Performance and Risk
So far this year, RFV has lost about -2.05%, and it's up approximately 23.09% in the last one year (as of 03/12/2024). During this past 52-week period, the fund has traded between $88.36 and $117.45.
The fund has a beta of 1.40 and standard deviation of 22.53% for the trailing three-year period, which makes RFV a high risk choice in this particular space. With about 94 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco S&P MidCap 400 Pure Value ETF is a reasonable option for investors seeking to outperform the Style Box - Mid Cap Value segment of the market. However, there are other ETFs in the space which investors could consider.
IShares Russell Mid-Cap Value ETF (IWS - Free Report) tracks Russell MidCap Value Index and the Vanguard Mid-Cap Value ETF (VOE - Free Report) tracks CRSP U.S. Mid Cap Value Index. IShares Russell Mid-Cap Value ETF has $13.70 billion in assets, Vanguard Mid-Cap Value ETF has $16.29 billion. IWS has an expense ratio of 0.23% and VOE 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 - Mid 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 MidCap 400 Pure Value ETF (RFV) a Strong ETF Right Now?
Designed to provide broad exposure to the Style Box - Mid Cap Value category of the market, the Invesco S&P MidCap 400 Pure Value ETF (RFV - Free Report) is a smart beta exchange traded fund launched on 03/01/2006.
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.
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
The fund is sponsored by Invesco. It has amassed assets over $320.45 million, making it one of the average sized ETFs in the Style Box - Mid Cap Value. RFV seeks to match the performance of the S&P MidCap 400 Pure Value Index before fees and expenses.
The S&P MidCap 400 Pure Value Index measures the performance of securities that exhibit strong value characteristics in the S&P MidCap 400 Index.
Cost & Other Expenses
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.
Operating expenses on an annual basis are 0.35% for this ETF, which makes it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 1.30%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
Representing 25.60% of the portfolio, the fund has heaviest allocation to the Consumer Discretionary sector; Financials and Industrials round out the top three.
When you look at individual holdings, Macy's Inc (M - Free Report) accounts for about 2.72% of the fund's total assets, followed by Pbf Energy Inc (PBF - Free Report) and United States Steel Corp (X - Free Report) .
RFV's top 10 holdings account for about 24.03% of its total assets under management.
Performance and Risk
So far this year, RFV has lost about -2.05%, and it's up approximately 23.09% in the last one year (as of 03/12/2024). During this past 52-week period, the fund has traded between $88.36 and $117.45.
The fund has a beta of 1.40 and standard deviation of 22.53% for the trailing three-year period, which makes RFV a high risk choice in this particular space. With about 94 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco S&P MidCap 400 Pure Value ETF is a reasonable option for investors seeking to outperform the Style Box - Mid Cap Value segment of the market. However, there are other ETFs in the space which investors could consider.
IShares Russell Mid-Cap Value ETF (IWS - Free Report) tracks Russell MidCap Value Index and the Vanguard Mid-Cap Value ETF (VOE - Free Report) tracks CRSP U.S. Mid Cap Value Index. IShares Russell Mid-Cap Value ETF has $13.70 billion in assets, Vanguard Mid-Cap Value ETF has $16.29 billion. IWS has an expense ratio of 0.23% and VOE 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 - Mid 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.