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Is Invesco Russell 1000 Dynamic Multifactor ETF (OMFL) a Strong ETF Right Now?
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Designed to provide broad exposure to the Style Box - Large Cap Growth category of the market, the Invesco Russell 1000 Dynamic Multifactor ETF (OMFL - Free Report) is a smart beta exchange traded fund launched on 11/08/2017.
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.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
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.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
The fund is managed by Invesco. OMFL has been able to amass assets over $6.25 billion, making it one of the larger ETFs in the Style Box - Large Cap Growth. This particular fund, before fees and expenses, seeks to match the performance of the RUSSELL 1000 INVESCO DYNAMIC MLTIFCTR ID.
The Russell 1000 Invesco Dynamic Multifactor Index is constructed using a rules-based methodology by selecting equity securities from the Russell 1000 Index, which measures the performance of the 1,000 largest-capitalization companies in the United States.
Cost & Other Expenses
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
Annual operating expenses for OMFL are 0.29%, which makes it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.37%.
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 in the Industrials sector - about 20.80% of the portfolio. Information Technology and Financials round out the top three.
When you look at individual holdings, Builders Firstsource Inc (BLDR - Free Report) accounts for about 1.10% of the fund's total assets, followed by Hewlett Packard Enterprise Co (HPE - Free Report) and Western Digital Corp (WDC - Free Report) .
Its top 10 holdings account for approximately 8.59% of OMFL's total assets under management.
Performance and Risk
Year-to-date, the Invesco Russell 1000 Dynamic Multifactor ETF return is roughly 5.09% so far, and was up about 15.38% over the last 12 months (as of 05/23/2024). OMFL has traded between $43.21 and $55.23 in this past 52-week period.
The fund has a beta of 1.01 and standard deviation of 17.44% for the trailing three-year period. With about 376 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco Russell 1000 Dynamic Multifactor ETF is a reasonable option for investors seeking to outperform the Style Box - Large Cap Growth segment of the market. However, there are other ETFs in the space which investors could consider.
Vanguard Growth ETF (VUG - Free Report) tracks CRSP U.S. Large Cap Growth Index and the Invesco QQQ (QQQ - Free Report) tracks NASDAQ-100 Index. Vanguard Growth ETF has $124.41 billion in assets, Invesco QQQ has $270.62 billion. VUG has an expense ratio of 0.04% and QQQ charges 0.20%.
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 - Large 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 Russell 1000 Dynamic Multifactor ETF (OMFL) a Strong ETF Right Now?
Designed to provide broad exposure to the Style Box - Large Cap Growth category of the market, the Invesco Russell 1000 Dynamic Multifactor ETF (OMFL - Free Report) is a smart beta exchange traded fund launched on 11/08/2017.
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.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
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.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
The fund is managed by Invesco. OMFL has been able to amass assets over $6.25 billion, making it one of the larger ETFs in the Style Box - Large Cap Growth. This particular fund, before fees and expenses, seeks to match the performance of the RUSSELL 1000 INVESCO DYNAMIC MLTIFCTR ID.
The Russell 1000 Invesco Dynamic Multifactor Index is constructed using a rules-based methodology by selecting equity securities from the Russell 1000 Index, which measures the performance of the 1,000 largest-capitalization companies in the United States.
Cost & Other Expenses
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
Annual operating expenses for OMFL are 0.29%, which makes it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.37%.
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 in the Industrials sector - about 20.80% of the portfolio. Information Technology and Financials round out the top three.
When you look at individual holdings, Builders Firstsource Inc (BLDR - Free Report) accounts for about 1.10% of the fund's total assets, followed by Hewlett Packard Enterprise Co (HPE - Free Report) and Western Digital Corp (WDC - Free Report) .
Its top 10 holdings account for approximately 8.59% of OMFL's total assets under management.
Performance and Risk
Year-to-date, the Invesco Russell 1000 Dynamic Multifactor ETF return is roughly 5.09% so far, and was up about 15.38% over the last 12 months (as of 05/23/2024). OMFL has traded between $43.21 and $55.23 in this past 52-week period.
The fund has a beta of 1.01 and standard deviation of 17.44% for the trailing three-year period. With about 376 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco Russell 1000 Dynamic Multifactor ETF is a reasonable option for investors seeking to outperform the Style Box - Large Cap Growth segment of the market. However, there are other ETFs in the space which investors could consider.
Vanguard Growth ETF (VUG - Free Report) tracks CRSP U.S. Large Cap Growth Index and the Invesco QQQ (QQQ - Free Report) tracks NASDAQ-100 Index. Vanguard Growth ETF has $124.41 billion in assets, Invesco QQQ has $270.62 billion. VUG has an expense ratio of 0.04% and QQQ charges 0.20%.
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 - Large 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.