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Should Invesco S&P SmallCap 600 Pure Value ETF (RZV) Be on Your Investing Radar?
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Launched on 03/01/2006, the Invesco S&P SmallCap 600 Pure Value ETF (RZV - Free Report) is a passively managed exchange traded fund designed to provide a broad exposure to the Small Cap Value segment of the US equity market.
The fund is sponsored by Invesco. It has amassed assets over $245.22 million, making it one of the average sized ETFs attempting to match the Small Cap Value segment of the US equity market.
Why Small Cap Value
Small cap companies have market capitalization below $2 billion. They usually have higher potential than large and mid cap companies with stocks but higher risk.
While value stocks have lower than average price-to-earnings and price-to-book ratios, they also have lower than average sales and earnings growth rates. When you look at long-term performance, value stocks have outperformed growth stocks in nearly all markets. But in strong bull markets, growth stocks are more likely to be winners.
Costs
When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.
Annual operating expenses for this ETF are 0.35%, putting it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.43%.
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.
This ETF has heaviest allocation to the Consumer Discretionary sector--about 31.20% of the portfolio. Industrials and Financials round out the top three.
Looking at individual holdings, M/i Homes Inc (MHO - Free Report) accounts for about 2.03% of total assets, followed by Olympic Steel Inc (ZEUS - Free Report) and Skywest Inc (SKYW - Free Report) .
The top 10 holdings account for about 16.38% of total assets under management.
Performance and Risk
RZV seeks to match the performance of the S&P SmallCap 600 Pure Value Index before fees and expenses. 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.
The ETF has added about 8.43% so far this year and was up about 18.84% in the last one year (as of 07/17/2023). In the past 52-week period, it has traded between $76.31 and $106.78.
The ETF has a beta of 1.47 and standard deviation of 27.09% for the trailing three-year period, making it a high risk choice in the space. With about 152 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco S&P SmallCap 600 Pure Value ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, RZV is an outstanding option for investors seeking exposure to the Style Box - Small Cap Value segment of the market. There are other additional ETFs in the space that investors could consider as well.
The iShares Russell 2000 Value ETF (IWN - Free Report) and the Vanguard Small-Cap Value ETF (VBR - Free Report) track a similar index. While iShares Russell 2000 Value ETF has $11.57 billion in assets, Vanguard Small-Cap Value ETF has $25.28 billion. IWN has an expense ratio of 0.23% and VBR charges 0.07%.
Bottom-Line
An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also 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.
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Should Invesco S&P SmallCap 600 Pure Value ETF (RZV) Be on Your Investing Radar?
Launched on 03/01/2006, the Invesco S&P SmallCap 600 Pure Value ETF (RZV - Free Report) is a passively managed exchange traded fund designed to provide a broad exposure to the Small Cap Value segment of the US equity market.
The fund is sponsored by Invesco. It has amassed assets over $245.22 million, making it one of the average sized ETFs attempting to match the Small Cap Value segment of the US equity market.
Why Small Cap Value
Small cap companies have market capitalization below $2 billion. They usually have higher potential than large and mid cap companies with stocks but higher risk.
While value stocks have lower than average price-to-earnings and price-to-book ratios, they also have lower than average sales and earnings growth rates. When you look at long-term performance, value stocks have outperformed growth stocks in nearly all markets. But in strong bull markets, growth stocks are more likely to be winners.
Costs
When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.
Annual operating expenses for this ETF are 0.35%, putting it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.43%.
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.
This ETF has heaviest allocation to the Consumer Discretionary sector--about 31.20% of the portfolio. Industrials and Financials round out the top three.
Looking at individual holdings, M/i Homes Inc (MHO - Free Report) accounts for about 2.03% of total assets, followed by Olympic Steel Inc (ZEUS - Free Report) and Skywest Inc (SKYW - Free Report) .
The top 10 holdings account for about 16.38% of total assets under management.
Performance and Risk
RZV seeks to match the performance of the S&P SmallCap 600 Pure Value Index before fees and expenses. 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.
The ETF has added about 8.43% so far this year and was up about 18.84% in the last one year (as of 07/17/2023). In the past 52-week period, it has traded between $76.31 and $106.78.
The ETF has a beta of 1.47 and standard deviation of 27.09% for the trailing three-year period, making it a high risk choice in the space. With about 152 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco S&P SmallCap 600 Pure Value ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, RZV is an outstanding option for investors seeking exposure to the Style Box - Small Cap Value segment of the market. There are other additional ETFs in the space that investors could consider as well.
The iShares Russell 2000 Value ETF (IWN - Free Report) and the Vanguard Small-Cap Value ETF (VBR - Free Report) track a similar index. While iShares Russell 2000 Value ETF has $11.57 billion in assets, Vanguard Small-Cap Value ETF has $25.28 billion. IWN has an expense ratio of 0.23% and VBR charges 0.07%.
Bottom-Line
An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also 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.