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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.
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.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
The fund is managed by Invesco, and has been able to amass over $2.14 billion, which makes it one of the average sized ETFs in the Style Box - Large Cap Value. This particular fund, before fees and expenses, seeks to match the performance of the S&P 500 Pure Value Index.
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
Expense ratios are an important factor in the return of an ETF and in the long-term, cheaper funds can significantly outperform their more expensive cousins, other things remaining the same.
Annual operating expenses for RPV are 0.35%, which makes it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 2.56%.
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.
RPV's heaviest allocation is in the Financials sector, which is about 22.10% of the portfolio. Its Consumer Discretionary and Telecom round out the top three.
When you look at 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) .
RPV's top 10 holdings account for about 24.1% of its total assets under management.
Performance and Risk
So far this year, RPV has gained about 4.22%, and was up about 8.25% in the last one year (as of 07/25/2023). During this past 52-week period, the fund has traded between $69.84 and $89.43.
The fund has a beta of 1.18 and standard deviation of 21.57% 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 a reasonable option for investors seeking to outperform the Style Box - Large Cap Value segment of the market. However, there are other ETFs in the space which investors could consider.
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 $52.27 billion in assets, Vanguard Value ETF has $103.07 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.
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.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
The fund is managed by Invesco, and has been able to amass over $2.14 billion, which makes it one of the average sized ETFs in the Style Box - Large Cap Value. This particular fund, before fees and expenses, seeks to match the performance of the S&P 500 Pure Value Index.
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
Expense ratios are an important factor in the return of an ETF and in the long-term, cheaper funds can significantly outperform their more expensive cousins, other things remaining the same.
Annual operating expenses for RPV are 0.35%, which makes it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 2.56%.
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.
RPV's heaviest allocation is in the Financials sector, which is about 22.10% of the portfolio. Its Consumer Discretionary and Telecom round out the top three.
When you look at 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) .
RPV's top 10 holdings account for about 24.1% of its total assets under management.
Performance and Risk
So far this year, RPV has gained about 4.22%, and was up about 8.25% in the last one year (as of 07/25/2023). During this past 52-week period, the fund has traded between $69.84 and $89.43.
The fund has a beta of 1.18 and standard deviation of 21.57% 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 a reasonable option for investors seeking to outperform the Style Box - Large Cap Value segment of the market. However, there are other ETFs in the space which investors could consider.
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 $52.27 billion in assets, Vanguard Value ETF has $103.07 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.