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Should Invesco Russell 2000 Dynamic Multifactor ETF (OMFS) Be on Your Investing Radar?
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If you're interested in broad exposure to the Small Cap Blend segment of the US equity market, look no further than the Invesco Russell 2000 Dynamic Multifactor ETF (OMFS - Free Report) , a passively managed exchange traded fund launched on 11/08/2017.
The fund is sponsored by Invesco. It has amassed assets over $383.37 million, making it one of the average sized ETFs attempting to match the Small Cap Blend segment of the US equity market.
Why Small Cap Blend
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.
Typically holding a combination of both growth and value stocks, blend ETFs also demonstrate qualities seen in value and growth investments.
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 0.39%, 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 which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Industrials sector--about 22.50% of the portfolio. Financials and Consumer Discretionary round out the top three.
Looking at individual holdings, Hovnanian Enterprises Inc (HOV - Free Report) accounts for about 0.50% of total assets, followed by Beazer Homes Usa Inc (BZH - Free Report) and Andersons Inc/the (ANDE - Free Report) .
The top 10 holdings account for about 3.7% of total assets under management.
Performance and Risk
OMFS seeks to match the performance of the RUSSELL 2000 INVESCO DYNAMIC MLTIFCTR ID before fees and expenses. The Russell 2000 Invesco Dynamic Multifactor Index is constructed using a rules-based methodology by selecting equity securities from the Russell 2000 Index, which measures the performance of 2,000 small-capitalization companies in the United States.
The ETF has lost about -2.20% so far this year and it's up approximately 10.40% in the last one year (as of 04/01/2024). In the past 52-week period, it has traded between $31.78 and $39.65.
The ETF has a beta of 1.10 and standard deviation of 22.13% for the trailing three-year period. With about 1178 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco Russell 2000 Dynamic Multifactor 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, OMFS is a sufficient option for those seeking exposure to the Style Box - Small Cap Blend area of the market. Investors might also want to consider some other ETF options in the space.
The iShares Russell 2000 ETF (IWM - Free Report) and the iShares Core S&P Small-Cap ETF (IJR - Free Report) track a similar index. While iShares Russell 2000 ETF has $65.29 billion in assets, iShares Core S&P Small-Cap ETF has $80.22 billion. IWM has an expense ratio of 0.19% and IJR charges 0.06%.
Bottom-Line
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.
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 Russell 2000 Dynamic Multifactor ETF (OMFS) Be on Your Investing Radar?
If you're interested in broad exposure to the Small Cap Blend segment of the US equity market, look no further than the Invesco Russell 2000 Dynamic Multifactor ETF (OMFS - Free Report) , a passively managed exchange traded fund launched on 11/08/2017.
The fund is sponsored by Invesco. It has amassed assets over $383.37 million, making it one of the average sized ETFs attempting to match the Small Cap Blend segment of the US equity market.
Why Small Cap Blend
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.
Typically holding a combination of both growth and value stocks, blend ETFs also demonstrate qualities seen in value and growth investments.
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 0.39%, 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 which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Industrials sector--about 22.50% of the portfolio. Financials and Consumer Discretionary round out the top three.
Looking at individual holdings, Hovnanian Enterprises Inc (HOV - Free Report) accounts for about 0.50% of total assets, followed by Beazer Homes Usa Inc (BZH - Free Report) and Andersons Inc/the (ANDE - Free Report) .
The top 10 holdings account for about 3.7% of total assets under management.
Performance and Risk
OMFS seeks to match the performance of the RUSSELL 2000 INVESCO DYNAMIC MLTIFCTR ID before fees and expenses. The Russell 2000 Invesco Dynamic Multifactor Index is constructed using a rules-based methodology by selecting equity securities from the Russell 2000 Index, which measures the performance of 2,000 small-capitalization companies in the United States.
The ETF has lost about -2.20% so far this year and it's up approximately 10.40% in the last one year (as of 04/01/2024). In the past 52-week period, it has traded between $31.78 and $39.65.
The ETF has a beta of 1.10 and standard deviation of 22.13% for the trailing three-year period. With about 1178 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco Russell 2000 Dynamic Multifactor 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, OMFS is a sufficient option for those seeking exposure to the Style Box - Small Cap Blend area of the market. Investors might also want to consider some other ETF options in the space.
The iShares Russell 2000 ETF (IWM - Free Report) and the iShares Core S&P Small-Cap ETF (IJR - Free Report) track a similar index. While iShares Russell 2000 ETF has $65.29 billion in assets, iShares Core S&P Small-Cap ETF has $80.22 billion. IWM has an expense ratio of 0.19% and IJR charges 0.06%.
Bottom-Line
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.
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.