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Is Invesco S&P MidCap 400 Pure Value ETF (RFV) a Strong ETF Right Now?
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Making its debut on 03/01/2006, smart beta exchange traded fund Invesco S&P MidCap 400 Pure Value ETF (RFV - Free Report) provides investors broad exposure to the Style Box - Mid Cap Value category of the market.
What Are Smart Beta ETFs?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking 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.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
RFV is managed by Invesco, and this fund has amassed over $313.89 million, which makes it one of the average sized ETFs in the Style Box - Mid Cap Value. RFV, before fees and expenses, seeks to match the performance of the S&P MidCap 400 Pure Value Index.
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.
RFV's 12-month trailing dividend yield is 1.25%.
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.
For RFV, it has heaviest allocation in the Consumer Discretionary sector --about 24.60% of the portfolio --while Financials and Industrials round out the top three.
When you look at individual holdings, Pbf Energy Inc (PBF - Free Report) accounts for about 3.53% of the fund's total assets, followed by Macy's Inc (M - Free Report) and Td Synnex Corp (SNX - Free Report) .
The top 10 holdings account for about 23.99% of total assets under management.
Performance and Risk
Year-to-date, the Invesco S&P MidCap 400 Pure Value ETF has lost about -0.49% so far, and it's up approximately 27.02% over the last 12 months (as of 05/13/2024). RFV has traded between $91.10 and $119.29 in this past 52-week period.
The ETF has a beta of 1.41 and standard deviation of 22.31% for the trailing three-year period, making it a high risk choice in the space. With about 92 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 $12.89 billion in assets, Vanguard Mid-Cap Value ETF has $16.45 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?
Making its debut on 03/01/2006, smart beta exchange traded fund Invesco S&P MidCap 400 Pure Value ETF (RFV - Free Report) provides investors broad exposure to the Style Box - Mid Cap Value category of the market.
What Are Smart Beta ETFs?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking 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.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
RFV is managed by Invesco, and this fund has amassed over $313.89 million, which makes it one of the average sized ETFs in the Style Box - Mid Cap Value. RFV, before fees and expenses, seeks to match the performance of the S&P MidCap 400 Pure Value Index.
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.
RFV's 12-month trailing dividend yield is 1.25%.
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.
For RFV, it has heaviest allocation in the Consumer Discretionary sector --about 24.60% of the portfolio --while Financials and Industrials round out the top three.
When you look at individual holdings, Pbf Energy Inc (PBF - Free Report) accounts for about 3.53% of the fund's total assets, followed by Macy's Inc (M - Free Report) and Td Synnex Corp (SNX - Free Report) .
The top 10 holdings account for about 23.99% of total assets under management.
Performance and Risk
Year-to-date, the Invesco S&P MidCap 400 Pure Value ETF has lost about -0.49% so far, and it's up approximately 27.02% over the last 12 months (as of 05/13/2024). RFV has traded between $91.10 and $119.29 in this past 52-week period.
The ETF has a beta of 1.41 and standard deviation of 22.31% for the trailing three-year period, making it a high risk choice in the space. With about 92 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 $12.89 billion in assets, Vanguard Mid-Cap Value ETF has $16.45 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.