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Is Invesco S&P 500 Pure Growth ETF (RPG) a Strong ETF Right Now?
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A smart beta exchange traded fund, the Invesco S&P 500 Pure Growth ETF (RPG - Free Report) debuted on 03/01/2006, and offers broad exposure to the Style Box - Large Cap Growth 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.
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.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
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 sponsored by Invesco. It has amassed assets over $2.05 billion, making it one of the average sized ETFs in the Style Box - Large Cap Growth. Before fees and expenses, RPG seeks to match the performance of the S&P 500 Pure Growth Index.
The S&P 500 Pure Growth Index measures the performance of securities that exhibit strong growth characteristics in the S&P 500 Index.
Cost & Other Expenses
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.
Annual operating expenses for this ETF are 0.35%, making it on par with most peer products in the space.
RPG's 12-month trailing dividend yield is 1.23%.
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 in the Energy sector - about 30.10% of the portfolio. Healthcare and Information Technology round out the top three.
When you look at individual holdings, Mosaic Co/the (MOS - Free Report) accounts for about 2.60% of the fund's total assets, followed by Apa Corp (APA - Free Report) and Diamondback Energy Inc (FANG - Free Report) .
Its top 10 holdings account for approximately 21.85% of RPG's total assets under management.
Performance and Risk
The ETF has added about 1.31% so far this year and is down about -13.48% in the last one year (as of 04/11/2023). In the past 52-week period, it has traded between $141.64 and $177.23.
The ETF has a beta of 1.13 and standard deviation of 25.61% for the trailing three-year period, making it a medium risk choice in the space. With about 75 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco S&P 500 Pure Growth ETF is an excellent option for investors seeking to outperform the Style Box - Large Cap Growth segment of the market. There are other ETFs in the space which investors could consider as well.
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 $80.86 billion in assets, Invesco QQQ has $171.44 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 S&P 500 Pure Growth ETF (RPG) a Strong ETF Right Now?
A smart beta exchange traded fund, the Invesco S&P 500 Pure Growth ETF (RPG - Free Report) debuted on 03/01/2006, and offers broad exposure to the Style Box - Large Cap Growth 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.
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.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
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 sponsored by Invesco. It has amassed assets over $2.05 billion, making it one of the average sized ETFs in the Style Box - Large Cap Growth. Before fees and expenses, RPG seeks to match the performance of the S&P 500 Pure Growth Index.
The S&P 500 Pure Growth Index measures the performance of securities that exhibit strong growth characteristics in the S&P 500 Index.
Cost & Other Expenses
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.
Annual operating expenses for this ETF are 0.35%, making it on par with most peer products in the space.
RPG's 12-month trailing dividend yield is 1.23%.
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 in the Energy sector - about 30.10% of the portfolio. Healthcare and Information Technology round out the top three.
When you look at individual holdings, Mosaic Co/the (MOS - Free Report) accounts for about 2.60% of the fund's total assets, followed by Apa Corp (APA - Free Report) and Diamondback Energy Inc (FANG - Free Report) .
Its top 10 holdings account for approximately 21.85% of RPG's total assets under management.
Performance and Risk
The ETF has added about 1.31% so far this year and is down about -13.48% in the last one year (as of 04/11/2023). In the past 52-week period, it has traded between $141.64 and $177.23.
The ETF has a beta of 1.13 and standard deviation of 25.61% for the trailing three-year period, making it a medium risk choice in the space. With about 75 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco S&P 500 Pure Growth ETF is an excellent option for investors seeking to outperform the Style Box - Large Cap Growth segment of the market. There are other ETFs in the space which investors could consider as well.
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 $80.86 billion in assets, Invesco QQQ has $171.44 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.