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Is Invesco S&P 500 Pure Value ETF (RPV) a Strong ETF Right Now?
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A smart beta exchange traded fund, the Invesco S&P 500 Pure Value ETF (RPV - Free Report) debuted on 03/01/2006, and offers broad exposure to the Style Box - Large 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 work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
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.
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
Managed by Invesco, RPV has amassed assets over $2.20 billion, making it one of the average sized ETFs in the Style Box - Large Cap Value. This particular fund seeks to match the performance of the S&P 500 Pure Value Index before fees and expenses.
The S&P 500 Pure Value Index measures the performance of securities that exhibit strong value characteristics in the S&P 500 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 RPV, making it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 2.79%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Financials sector - about 22% of the portfolio. Consumer Discretionary and Telecom round out the top three.
Taking into account individual holdings, Paramount Global (PARA - Free Report) accounts for about 3.86% of the fund's total assets, followed by Warner Bros Discovery Inc (WBD - Free Report) and General Motors Co (GM - Free Report) .
Its top 10 holdings account for approximately 24.1% of RPV's total assets under management.
Performance and Risk
The ETF has lost about -5.58% so far this year and is down about -6.26% in the last one year (as of 05/23/2023). In the past 52-week period, it has traded between $69.84 and $89.43.
The fund has a beta of 1.17 and standard deviation of 23.67% for the trailing three-year period, which makes RPV a medium risk choice in this particular space. With about 83 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco S&P 500 Pure Value ETF is an excellent option for investors seeking to outperform the Style Box - Large Cap Value segment of the market. There are other ETFs in the space which investors could consider as well.
IShares Russell 1000 Value ETF (IWD - Free Report) tracks Russell 1000 Value Index and the Vanguard Value ETF (VTV - Free Report) tracks CRSP U.S. Large Cap Value Index. IShares Russell 1000 Value ETF has $49.26 billion in assets, Vanguard Value ETF has $100.05 billion. IWD has an expense ratio of 0.18% and VTV charges 0.04%.
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 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 500 Pure Value ETF (RPV) a Strong ETF Right Now?
A smart beta exchange traded fund, the Invesco S&P 500 Pure Value ETF (RPV - Free Report) debuted on 03/01/2006, and offers broad exposure to the Style Box - Large 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 work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
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.
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
Managed by Invesco, RPV has amassed assets over $2.20 billion, making it one of the average sized ETFs in the Style Box - Large Cap Value. This particular fund seeks to match the performance of the S&P 500 Pure Value Index before fees and expenses.
The S&P 500 Pure Value Index measures the performance of securities that exhibit strong value characteristics in the S&P 500 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 RPV, making it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 2.79%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Financials sector - about 22% of the portfolio. Consumer Discretionary and Telecom round out the top three.
Taking into account individual holdings, Paramount Global (PARA - Free Report) accounts for about 3.86% of the fund's total assets, followed by Warner Bros Discovery Inc (WBD - Free Report) and General Motors Co (GM - Free Report) .
Its top 10 holdings account for approximately 24.1% of RPV's total assets under management.
Performance and Risk
The ETF has lost about -5.58% so far this year and is down about -6.26% in the last one year (as of 05/23/2023). In the past 52-week period, it has traded between $69.84 and $89.43.
The fund has a beta of 1.17 and standard deviation of 23.67% for the trailing three-year period, which makes RPV a medium risk choice in this particular space. With about 83 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco S&P 500 Pure Value ETF is an excellent option for investors seeking to outperform the Style Box - Large Cap Value segment of the market. There are other ETFs in the space which investors could consider as well.
IShares Russell 1000 Value ETF (IWD - Free Report) tracks Russell 1000 Value Index and the Vanguard Value ETF (VTV - Free Report) tracks CRSP U.S. Large Cap Value Index. IShares Russell 1000 Value ETF has $49.26 billion in assets, Vanguard Value ETF has $100.05 billion. IWD has an expense ratio of 0.18% and VTV charges 0.04%.
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 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.