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Should Invesco S&P MidCap 400 Pure Growth ETF (RFG) Be on Your Investing Radar?
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The Invesco S&P MidCap 400 Pure Growth ETF (RFG - Free Report) was launched on 03/01/2006, and is a passively managed exchange traded fund designed to offer broad exposure to the Mid Cap Growth segment of the US equity market.
The fund is sponsored by Invesco. It has amassed assets over $275.60 million, making it one of the average sized ETFs attempting to match the Mid Cap Growth segment of the US equity market.
Why Mid Cap Growth
Mid cap companies, with market capitalization in the range of $2 billion and $10 billion, offer investors many things that small and large companies don't, including less risk and higher growth opportunities. Thus, companies that fall under this category provide a stable and growth-heavy investment.
Growth stocks have higher than average sales and earnings growth rates. While these are expected to grow faster than the broader market, they also have higher valuations. Additionally, growth stocks have a greater level of risk associated with them. When you consider growth versus value, growth stocks are usually the clear winner in strong bull markets but tend to fall flat in nearly all other 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 0.35%, putting it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 0.91%.
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 Consumer Discretionary sector--about 23.20% of the portfolio. Industrials and Energy round out the top three.
Looking at individual holdings, Southwestern Energy Co accounts for about 2.48% of total assets, followed by Super Micro Computer Inc (SMCI - Free Report) and Cnx Resources Corp (CNX - Free Report) .
The top 10 holdings account for about 20.72% of total assets under management.
Performance and Risk
RFG seeks to match the performance of the S&P MidCap 400 Pure Growth Index before fees and expenses. The S&P MidCap 400 Pure Growth Index measures the performance of securities that exhibit strong growth characteristics in the S&P MidCap 400 Index.
The ETF return is roughly 8.78% so far this year and is up about 19.73% in the last one year (as of 02/20/2024). In the past 52-week period, it has traded between $34.48 and $45.57.
The ETF has a beta of 1.12 and standard deviation of 23.87% for the trailing three-year period, making it a medium risk choice in the space. With about 81 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco S&P MidCap 400 Pure Growth 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, RFG is a great option for investors seeking exposure to the Style Box - Mid Cap Growth segment of the market. There are other additional ETFs in the space that investors could consider as well.
The Vanguard Mid-Cap Growth ETF (VOT - Free Report) and the iShares Russell Mid-Cap Growth ETF (IWP - Free Report) track a similar index. While Vanguard Mid-Cap Growth ETF has $12.16 billion in assets, iShares Russell Mid-Cap Growth ETF has $14.90 billion. VOT has an expense ratio of 0.07% and IWP charges 0.23%.
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 S&P MidCap 400 Pure Growth ETF (RFG) Be on Your Investing Radar?
The Invesco S&P MidCap 400 Pure Growth ETF (RFG - Free Report) was launched on 03/01/2006, and is a passively managed exchange traded fund designed to offer broad exposure to the Mid Cap Growth segment of the US equity market.
The fund is sponsored by Invesco. It has amassed assets over $275.60 million, making it one of the average sized ETFs attempting to match the Mid Cap Growth segment of the US equity market.
Why Mid Cap Growth
Mid cap companies, with market capitalization in the range of $2 billion and $10 billion, offer investors many things that small and large companies don't, including less risk and higher growth opportunities. Thus, companies that fall under this category provide a stable and growth-heavy investment.
Growth stocks have higher than average sales and earnings growth rates. While these are expected to grow faster than the broader market, they also have higher valuations. Additionally, growth stocks have a greater level of risk associated with them. When you consider growth versus value, growth stocks are usually the clear winner in strong bull markets but tend to fall flat in nearly all other 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 0.35%, putting it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 0.91%.
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 Consumer Discretionary sector--about 23.20% of the portfolio. Industrials and Energy round out the top three.
Looking at individual holdings, Southwestern Energy Co accounts for about 2.48% of total assets, followed by Super Micro Computer Inc (SMCI - Free Report) and Cnx Resources Corp (CNX - Free Report) .
The top 10 holdings account for about 20.72% of total assets under management.
Performance and Risk
RFG seeks to match the performance of the S&P MidCap 400 Pure Growth Index before fees and expenses. The S&P MidCap 400 Pure Growth Index measures the performance of securities that exhibit strong growth characteristics in the S&P MidCap 400 Index.
The ETF return is roughly 8.78% so far this year and is up about 19.73% in the last one year (as of 02/20/2024). In the past 52-week period, it has traded between $34.48 and $45.57.
The ETF has a beta of 1.12 and standard deviation of 23.87% for the trailing three-year period, making it a medium risk choice in the space. With about 81 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco S&P MidCap 400 Pure Growth 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, RFG is a great option for investors seeking exposure to the Style Box - Mid Cap Growth segment of the market. There are other additional ETFs in the space that investors could consider as well.
The Vanguard Mid-Cap Growth ETF (VOT - Free Report) and the iShares Russell Mid-Cap Growth ETF (IWP - Free Report) track a similar index. While Vanguard Mid-Cap Growth ETF has $12.16 billion in assets, iShares Russell Mid-Cap Growth ETF has $14.90 billion. VOT has an expense ratio of 0.07% and IWP charges 0.23%.
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.