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Is Invesco S&P SmallCap 600 Pure Value ETF (RZV) a Strong ETF Right Now?
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Making its debut on 03/01/2006, smart beta exchange traded fund Invesco S&P SmallCap 600 Pure Value ETF (RZV - Free Report) provides investors broad exposure to the Style Box - Small Cap Value category of the market.
What Are Smart Beta ETFs?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.
Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
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
Because the fund has amassed over $237.64 million, this makes it one of the average sized ETFs in the Style Box - Small Cap Value. RZV is managed by Invesco. Before fees and expenses, RZV seeks to match the performance of the S&P SmallCap 600 Pure Value Index.
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
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.
Operating expenses on an annual basis are 0.35% for RZV, making it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 1.16%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
Representing 21.20% of the portfolio, the fund has heaviest allocation to the Financials sector; Consumer Discretionary and Industrials round out the top three.
Taking into account individual holdings, Phinia Inc (PHIN - Free Report) accounts for about 2.02% of the fund's total assets, followed by Bread Financial Holdings Inc (BFH - Free Report) and World Kinect Corp (WKC - Free Report) .
Its top 10 holdings account for approximately 17.23% of RZV's total assets under management.
Performance and Risk
The ETF has lost about -5.12% so far this year and is up about 2.40% in the last one year (as of 08/08/2024). In the past 52-week period, it has traded between $83.38 and $112.42.
The fund has a beta of 1.43 and standard deviation of 24.47% for the trailing three-year period, which makes RZV a high risk choice in this particular space. With about 140 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.
Avantis U.S. Small Cap Value ETF (AVUV - Free Report) tracks ---------------------------------------- and the Vanguard Small-Cap Value ETF (VBR - Free Report) tracks CRSP U.S. Small Cap Value Index. Avantis U.S. Small Cap Value ETF has $11.96 billion in assets, Vanguard Small-Cap Value ETF has $27.86 billion. AVUV has an expense ratio of 0.25% 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?
Making its debut on 03/01/2006, smart beta exchange traded fund Invesco S&P SmallCap 600 Pure Value ETF (RZV - Free Report) provides investors broad exposure to the Style Box - Small Cap Value category of the market.
What Are Smart Beta ETFs?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.
Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
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
Because the fund has amassed over $237.64 million, this makes it one of the average sized ETFs in the Style Box - Small Cap Value. RZV is managed by Invesco. Before fees and expenses, RZV seeks to match the performance of the S&P SmallCap 600 Pure Value Index.
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
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.
Operating expenses on an annual basis are 0.35% for RZV, making it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 1.16%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
Representing 21.20% of the portfolio, the fund has heaviest allocation to the Financials sector; Consumer Discretionary and Industrials round out the top three.
Taking into account individual holdings, Phinia Inc (PHIN - Free Report) accounts for about 2.02% of the fund's total assets, followed by Bread Financial Holdings Inc (BFH - Free Report) and World Kinect Corp (WKC - Free Report) .
Its top 10 holdings account for approximately 17.23% of RZV's total assets under management.
Performance and Risk
The ETF has lost about -5.12% so far this year and is up about 2.40% in the last one year (as of 08/08/2024). In the past 52-week period, it has traded between $83.38 and $112.42.
The fund has a beta of 1.43 and standard deviation of 24.47% for the trailing three-year period, which makes RZV a high risk choice in this particular space. With about 140 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.
Avantis U.S. Small Cap Value ETF (AVUV - Free Report) tracks ---------------------------------------- and the Vanguard Small-Cap Value ETF (VBR - Free Report) tracks CRSP U.S. Small Cap Value Index. Avantis U.S. Small Cap Value ETF has $11.96 billion in assets, Vanguard Small-Cap Value ETF has $27.86 billion. AVUV has an expense ratio of 0.25% 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.