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Should Invesco Russell 2000 Dynamic Multifactor ETF (OMFS) Be on Your Investing Radar?
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The Invesco Russell 2000 Dynamic Multifactor ETF (OMFS - Free Report) was launched on 11/08/2017, and is a passively managed exchange traded fund designed to offer broad exposure to the Small Cap Blend segment of the US equity market.
The fund is sponsored by Invesco. It has amassed assets over $343.45 million, making it one of the average sized ETFs attempting to match the Small Cap Blend segment of the US equity market.
Why Small Cap Blend
There's a lot of potential to investing in small cap companies, but with market capitalization below $2 billion, that high potential comes with even higher risk.
Blend ETFs are aptly named, since they tend to hold a mix of growth and value stocks, as well as show characteristics of both kinds of equities.
Costs
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are the same.
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 1.67%.
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 to the Financials sector--about 23% of the portfolio. Industrials and Information Technology round out the top three.
Looking at individual holdings, Emcor Group Inc (EME - Free Report) accounts for about 1.59% of total assets, followed by Kinsale Capital Group Inc (KNSL - Free Report) and Murphy Usa Inc (MUSA - Free Report) .
The top 10 holdings account for about 11.56% of total assets under management.
Performance and Risk
OMFS seeks to match the performance of the RUSSELL 2000 INVESCO DYNAMIC MLTIFCTR ID before fees and expenses. The Russell 2000 Invesco Dynamic Multifactor Index is constructed using a rules-based methodology by selecting equity securities from the Russell 2000 Index, which measures the performance of 2,000 small-capitalization companies in the United States.
The ETF has added roughly 9.02% so far this year and is up about 8.28% in the last one year (as of 07/24/2023). In the past 52-week period, it has traded between $31.60 and $38.79.
The ETF has a beta of 1.11 and standard deviation of 24.84% for the trailing three-year period. With about 709 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco Russell 2000 Dynamic Multifactor 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, OMFS is an excellent option for investors seeking exposure to the Style Box - Small Cap Blend segment of the market. There are other additional ETFs in the space that investors could consider as well.
The iShares Russell 2000 ETF (IWM - Free Report) and the iShares Core S&P Small-Cap ETF (IJR - Free Report) track a similar index. While iShares Russell 2000 ETF has $56 billion in assets, iShares Core S&P Small-Cap ETF has $71.82 billion. IWM has an expense ratio of 0.19% and IJR charges 0.06%.
Bottom-Line
While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.
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 Russell 2000 Dynamic Multifactor ETF (OMFS) Be on Your Investing Radar?
The Invesco Russell 2000 Dynamic Multifactor ETF (OMFS - Free Report) was launched on 11/08/2017, and is a passively managed exchange traded fund designed to offer broad exposure to the Small Cap Blend segment of the US equity market.
The fund is sponsored by Invesco. It has amassed assets over $343.45 million, making it one of the average sized ETFs attempting to match the Small Cap Blend segment of the US equity market.
Why Small Cap Blend
There's a lot of potential to investing in small cap companies, but with market capitalization below $2 billion, that high potential comes with even higher risk.
Blend ETFs are aptly named, since they tend to hold a mix of growth and value stocks, as well as show characteristics of both kinds of equities.
Costs
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are the same.
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 1.67%.
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 to the Financials sector--about 23% of the portfolio. Industrials and Information Technology round out the top three.
Looking at individual holdings, Emcor Group Inc (EME - Free Report) accounts for about 1.59% of total assets, followed by Kinsale Capital Group Inc (KNSL - Free Report) and Murphy Usa Inc (MUSA - Free Report) .
The top 10 holdings account for about 11.56% of total assets under management.
Performance and Risk
OMFS seeks to match the performance of the RUSSELL 2000 INVESCO DYNAMIC MLTIFCTR ID before fees and expenses. The Russell 2000 Invesco Dynamic Multifactor Index is constructed using a rules-based methodology by selecting equity securities from the Russell 2000 Index, which measures the performance of 2,000 small-capitalization companies in the United States.
The ETF has added roughly 9.02% so far this year and is up about 8.28% in the last one year (as of 07/24/2023). In the past 52-week period, it has traded between $31.60 and $38.79.
The ETF has a beta of 1.11 and standard deviation of 24.84% for the trailing three-year period. With about 709 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco Russell 2000 Dynamic Multifactor 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, OMFS is an excellent option for investors seeking exposure to the Style Box - Small Cap Blend segment of the market. There are other additional ETFs in the space that investors could consider as well.
The iShares Russell 2000 ETF (IWM - Free Report) and the iShares Core S&P Small-Cap ETF (IJR - Free Report) track a similar index. While iShares Russell 2000 ETF has $56 billion in assets, iShares Core S&P Small-Cap ETF has $71.82 billion. IWM has an expense ratio of 0.19% and IJR charges 0.06%.
Bottom-Line
While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.
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.