The Invesco S&P Ultra Dividend Revenue ETF (RDIV Quick QuoteRDIV - Free Report) was launched on 10/01/2013, and is a passively managed exchange traded fund designed to offer broad exposure to the Large Cap Value segment of the US equity market.

The fund is sponsored by Invesco. It has amassed assets over $816.70 million, making it one of the average sized ETFs attempting to match the Large Cap Value segment of the US equity market.

Why Large Cap Value

Large cap companies typically have a market capitalization above $10 billion. Overall, they are usually a stable option, with less risk and more sure-fire cash flows than mid and small cap companies.

Carrying lower than average price-to-earnings and price-to-book ratios, value stocks also have lower than average sales and earnings growth rates. Considering long-term performance, value stocks have outperformed growth stocks in almost all markets; however, they are more likely to underperform growth stocks in strong bull markets.

Costs

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 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 2.71%.

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.

This ETF has heaviest allocation to the Financials sector--about 28.40% of the portfolio. Utilities and Consumer Discretionary round out the top three.

Looking at individual holdings, Best Buy Co Inc (BBY Quick QuoteBBY - Free Report) accounts for about 5.48% of total assets, followed by Bristol-Myers Squibb Co (BMY Quick QuoteBMY - Free Report) and Philip Morris International Inc (PM Quick QuotePM - Free Report) .

The top 10 holdings account for about 49.34% of total assets under management.

Performance and Risk

RDIV seeks to match the performance of the OFI Revenue Weighted Ultra Dividend Index before fees and expenses. The S&P 900 Dividend Revenue-Weighted Index is constructed using a rules-based methodology that starts with the S&P 900 Index, subject to a maximum 5% per company weighting.

The ETF has gained about 16.38% so far this year and is up roughly 34.33% in the last one year (as of 09/23/2024). In the past 52-week period, it has traded between $34.73 and $50.12.

The ETF has a beta of 1.12 and standard deviation of 18.06% for the trailing three-year period, making it a medium risk choice in the space. With about 61 holdings, it effectively diversifies company-specific risk.

Alternatives

Invesco S&P Ultra Dividend Revenue 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, RDIV is a good option for those seeking exposure to the Style Box - Large Cap Value area of the market. Investors might also want to consider some other ETF options in the space.

The Schwab U.S. Dividend Equity ETF (SCHD Quick QuoteSCHD - Free Report) and the Vanguard Value ETF (VTV Quick QuoteVTV - Free Report) track a similar index. While Schwab U.S. Dividend Equity ETF has $61.03 billion in assets, Vanguard Value ETF has $127.29 billion. SCHD has an expense ratio of 0.06% and VTV charges 0.04%.

Bottom-Line

Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are 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.