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Is Invesco S&P MidCap 400 Pure Value ETF (RFV) a Strong ETF Right Now?
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Designed to provide broad exposure to the Style Box - Mid Cap Value category of the market, the Invesco S&P MidCap 400 Pure Value ETF (RFV - Free Report) is a smart beta exchange traded fund launched on 03/01/2006.
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.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
The fund is managed by Invesco. RFV has been able to amass assets over $309.12 million, making it one of the average sized ETFs in the Style Box - Mid Cap Value. Before fees and expenses, this particular fund 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
For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.
Annual operating expenses for RFV are 0.35%, which makes it on par with most peer products in the space.
RFV's 12-month trailing dividend yield is 1.85%.
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.
RFV's heaviest allocation is in the Consumer Discretionary sector, which is about 34.10% of the portfolio. Its Information Technology and Financials round out the top three.
When you look at individual holdings, Goodyear Tire & Rubber Co/the (GT - Free Report) accounts for about 3.15% of the fund's total assets, followed by United States Steel Corp (X - Free Report) and Taylor Morrison Home Corp (TMHC - Free Report) .
Its top 10 holdings account for approximately 25.57% of RFV's total assets under management.
Performance and Risk
The ETF return is roughly 11.34% and was up about 7.57% so far this year and in the past one year (as of 02/22/2023), respectively. RFV has traded between $79.72 and $109.34 during this last 52-week period.
The fund has a beta of 1.43 and standard deviation of 34.45% for the trailing three-year period, which makes RFV a high risk choice in this particular space. With about 78 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 $13.23 billion in assets, Vanguard Mid-Cap Value ETF has $16.64 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?
Designed to provide broad exposure to the Style Box - Mid Cap Value category of the market, the Invesco S&P MidCap 400 Pure Value ETF (RFV - Free Report) is a smart beta exchange traded fund launched on 03/01/2006.
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.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
The fund is managed by Invesco. RFV has been able to amass assets over $309.12 million, making it one of the average sized ETFs in the Style Box - Mid Cap Value. Before fees and expenses, this particular fund 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
For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.
Annual operating expenses for RFV are 0.35%, which makes it on par with most peer products in the space.
RFV's 12-month trailing dividend yield is 1.85%.
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.
RFV's heaviest allocation is in the Consumer Discretionary sector, which is about 34.10% of the portfolio. Its Information Technology and Financials round out the top three.
When you look at individual holdings, Goodyear Tire & Rubber Co/the (GT - Free Report) accounts for about 3.15% of the fund's total assets, followed by United States Steel Corp (X - Free Report) and Taylor Morrison Home Corp (TMHC - Free Report) .
Its top 10 holdings account for approximately 25.57% of RFV's total assets under management.
Performance and Risk
The ETF return is roughly 11.34% and was up about 7.57% so far this year and in the past one year (as of 02/22/2023), respectively. RFV has traded between $79.72 and $109.34 during this last 52-week period.
The fund has a beta of 1.43 and standard deviation of 34.45% for the trailing three-year period, which makes RFV a high risk choice in this particular space. With about 78 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 $13.23 billion in assets, Vanguard Mid-Cap Value ETF has $16.64 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.