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Is Invesco Russell 1000 Dynamic Multifactor ETF (OMFL) a Strong ETF Right Now?
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Making its debut on 11/08/2017, smart beta exchange traded fund Invesco Russell 1000 Dynamic Multifactor ETF (OMFL - Free Report) provides investors broad exposure to the Style Box - Large Cap Growth category of the market.
What Are Smart Beta ETFs?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
The fund is managed by Invesco, and has been able to amass over $6.10 billion, which makes it one of the larger ETFs in the Style Box - Large Cap Growth. Before fees and expenses, this particular fund seeks to match the performance of the RUSSELL 1000 INVESCO DYNAMIC MLTIFCTR ID.
The Russell 1000 Invesco Dynamic Multifactor Index is constructed using a rules-based methodology by selecting equity securities from the Russell 1000 Index, which measures the performance of the 1,000 largest-capitalization companies in the United States.
Cost & Other Expenses
For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.
Operating expenses on an annual basis are 0.29% for OMFL, making it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 1.33%.
Sector Exposure and Top Holdings
Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.
This ETF has heaviest allocation in the Industrials sector - about 20.40% of the portfolio. Information Technology and Financials round out the top three.
Taking into account individual holdings, Builders Firstsource Inc (BLDR - Free Report) accounts for about 0.92% of the fund's total assets, followed by Marathon Petroleum Corp (MPC - Free Report) and Pultegroup Inc (PHM - Free Report) .
The top 10 holdings account for about 7.25% of total assets under management.
Performance and Risk
So far this year, OMFL return is roughly 2.68%, and was up about 19.91% in the last one year (as of 03/18/2024). During this past 52-week period, the fund has traded between $43.21 and $53.36.
OMFL has a beta of 1 and standard deviation of 17.55% for the trailing three-year period. With about 718 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco Russell 1000 Dynamic Multifactor ETF is an excellent option for investors seeking to outperform the Style Box - Large Cap Growth segment of the market. There are other ETFs in the space which investors could consider as well.
Vanguard Growth ETF (VUG - Free Report) tracks CRSP U.S. Large Cap Growth Index and the Invesco QQQ (QQQ - Free Report) tracks NASDAQ-100 Index. Vanguard Growth ETF has $115.56 billion in assets, Invesco QQQ has $251.45 billion. VUG has an expense ratio of 0.04% and QQQ charges 0.20%.
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 Growth.
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 Russell 1000 Dynamic Multifactor ETF (OMFL) a Strong ETF Right Now?
Making its debut on 11/08/2017, smart beta exchange traded fund Invesco Russell 1000 Dynamic Multifactor ETF (OMFL - Free Report) provides investors broad exposure to the Style Box - Large Cap Growth category of the market.
What Are Smart Beta ETFs?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
The fund is managed by Invesco, and has been able to amass over $6.10 billion, which makes it one of the larger ETFs in the Style Box - Large Cap Growth. Before fees and expenses, this particular fund seeks to match the performance of the RUSSELL 1000 INVESCO DYNAMIC MLTIFCTR ID.
The Russell 1000 Invesco Dynamic Multifactor Index is constructed using a rules-based methodology by selecting equity securities from the Russell 1000 Index, which measures the performance of the 1,000 largest-capitalization companies in the United States.
Cost & Other Expenses
For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.
Operating expenses on an annual basis are 0.29% for OMFL, making it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 1.33%.
Sector Exposure and Top Holdings
Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.
This ETF has heaviest allocation in the Industrials sector - about 20.40% of the portfolio. Information Technology and Financials round out the top three.
Taking into account individual holdings, Builders Firstsource Inc (BLDR - Free Report) accounts for about 0.92% of the fund's total assets, followed by Marathon Petroleum Corp (MPC - Free Report) and Pultegroup Inc (PHM - Free Report) .
The top 10 holdings account for about 7.25% of total assets under management.
Performance and Risk
So far this year, OMFL return is roughly 2.68%, and was up about 19.91% in the last one year (as of 03/18/2024). During this past 52-week period, the fund has traded between $43.21 and $53.36.
OMFL has a beta of 1 and standard deviation of 17.55% for the trailing three-year period. With about 718 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco Russell 1000 Dynamic Multifactor ETF is an excellent option for investors seeking to outperform the Style Box - Large Cap Growth segment of the market. There are other ETFs in the space which investors could consider as well.
Vanguard Growth ETF (VUG - Free Report) tracks CRSP U.S. Large Cap Growth Index and the Invesco QQQ (QQQ - Free Report) tracks NASDAQ-100 Index. Vanguard Growth ETF has $115.56 billion in assets, Invesco QQQ has $251.45 billion. VUG has an expense ratio of 0.04% and QQQ charges 0.20%.
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 Growth.
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.