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Should Invesco S&P SmallCap Momentum ETF (XSMO) Be on Your Investing Radar?
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The Invesco S&P SmallCap Momentum ETF (XSMO - Free Report) was launched on 03/03/2005, and is a passively managed exchange traded fund designed to offer broad exposure to the Small Cap Growth segment of the US equity market.
The fund is sponsored by Invesco. It has amassed assets over $294.62 million, making it one of the average sized ETFs attempting to match the Small Cap Growth segment of the US equity market.
Why Small Cap Growth
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 growth stocks do boast higher than average sales and earnings growth rates, and they are expected to grow faster than the wider market, investors should note these kinds of stocks have higher valuations. Further, growth stocks have a higher level of volatility associated with them. Compared to value stocks, growth stocks are a safer bet in a strong bull market, but don't perform as strongly in almost all other financial environments.
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 0.39%, putting it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 0.96%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Industrials sector--about 23.20% of the portfolio. Consumer Discretionary and Information Technology round out the top three.
Looking at individual holdings, Elf Beauty Inc (ELF - Free Report) accounts for about 4.55% of total assets, followed by Ati Inc (ATI - Free Report) and Insight Enterprises Inc (NSIT - Free Report) .
The top 10 holdings account for about 25.51% of total assets under management.
Performance and Risk
XSMO seeks to match the performance of the S&P SMALLCAP 600 MOMENTUM INDEX before fees and expenses. The S&P Smallcap 600 Momentum Index is composed of securities with strong growth characteristics selected from the Russell 2000 Index.
The ETF has lost about -0.38% so far this year and was up about 14.17% in the last one year (as of 02/14/2024). In the past 52-week period, it has traded between $43.62 and $58.35.
The ETF has a beta of 1.05 and standard deviation of 24.56% for the trailing three-year period. With about 113 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco S&P SmallCap Momentum 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, XSMO is an excellent option for investors seeking exposure to the Style Box - Small Cap Growth segment of the market. There are other additional ETFs in the space that investors could consider as well.
The iShares Russell 2000 Growth ETF (IWO - Free Report) and the Vanguard Small-Cap Growth ETF (VBK - Free Report) track a similar index. While iShares Russell 2000 Growth ETF has $10.76 billion in assets, Vanguard Small-Cap Growth ETF has $15.58 billion. IWO has an expense ratio of 0.24% and VBK charges 0.07%.
Bottom-Line
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are 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 Momentum ETF (XSMO) Be on Your Investing Radar?
The Invesco S&P SmallCap Momentum ETF (XSMO - Free Report) was launched on 03/03/2005, and is a passively managed exchange traded fund designed to offer broad exposure to the Small Cap Growth segment of the US equity market.
The fund is sponsored by Invesco. It has amassed assets over $294.62 million, making it one of the average sized ETFs attempting to match the Small Cap Growth segment of the US equity market.
Why Small Cap Growth
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 growth stocks do boast higher than average sales and earnings growth rates, and they are expected to grow faster than the wider market, investors should note these kinds of stocks have higher valuations. Further, growth stocks have a higher level of volatility associated with them. Compared to value stocks, growth stocks are a safer bet in a strong bull market, but don't perform as strongly in almost all other financial environments.
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 0.39%, putting it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 0.96%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Industrials sector--about 23.20% of the portfolio. Consumer Discretionary and Information Technology round out the top three.
Looking at individual holdings, Elf Beauty Inc (ELF - Free Report) accounts for about 4.55% of total assets, followed by Ati Inc (ATI - Free Report) and Insight Enterprises Inc (NSIT - Free Report) .
The top 10 holdings account for about 25.51% of total assets under management.
Performance and Risk
XSMO seeks to match the performance of the S&P SMALLCAP 600 MOMENTUM INDEX before fees and expenses. The S&P Smallcap 600 Momentum Index is composed of securities with strong growth characteristics selected from the Russell 2000 Index.
The ETF has lost about -0.38% so far this year and was up about 14.17% in the last one year (as of 02/14/2024). In the past 52-week period, it has traded between $43.62 and $58.35.
The ETF has a beta of 1.05 and standard deviation of 24.56% for the trailing three-year period. With about 113 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco S&P SmallCap Momentum 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, XSMO is an excellent option for investors seeking exposure to the Style Box - Small Cap Growth segment of the market. There are other additional ETFs in the space that investors could consider as well.
The iShares Russell 2000 Growth ETF (IWO - Free Report) and the Vanguard Small-Cap Growth ETF (VBK - Free Report) track a similar index. While iShares Russell 2000 Growth ETF has $10.76 billion in assets, Vanguard Small-Cap Growth ETF has $15.58 billion. IWO has an expense ratio of 0.24% and VBK charges 0.07%.
Bottom-Line
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are 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.