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Is Invesco S&P MidCap 400 Pure Growth ETF (RFG) a Strong ETF Right Now?
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Designed to provide broad exposure to the Style Box - Mid Cap Growth category of the market, the Invesco S&P MidCap 400 Pure Growth ETF (RFG - Free Report) is a smart beta exchange traded fund launched on 03/01/2006.
What Are Smart Beta ETFs?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.
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.
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.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
The fund is managed by Invesco. RFG has been able to amass assets over $355.63 million, making it one of the average sized ETFs in the Style Box - Mid Cap Growth. Before fees and expenses, RFG seeks to match the performance of the S&P MidCap 400 Pure Growth Index.
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.
Cost & Other Expenses
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
Operating expenses on an annual basis are 0.35% for this ETF, which makes it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 0.74%.
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.
RFG's heaviest allocation is in the Consumer Discretionary sector, which is about 22.10% of the portfolio. Its Industrials and Energy round out the top three.
Looking at individual holdings, Celsius Holdings Inc (CELH - Free Report) accounts for about 2.59% of total assets, followed by Southwestern Energy Co (SWN - Free Report) and Cnx Resources Corp (CNX - Free Report) .
RFG's top 10 holdings account for about 22.7% of its total assets under management.
Performance and Risk
The ETF has added roughly 18.57% so far this year and is up about 33.55% in the last one year (as of 06/06/2024). In the past 52-week period, it has traded between $36.89 and $50.70.
RFG has a beta of 1.15 and standard deviation of 23.23% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 84 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco S&P MidCap 400 Pure Growth ETF is a reasonable option for investors seeking to outperform the Style Box - Mid Cap Growth segment of the market. However, there are other ETFs in the space which investors could consider.
Vanguard Mid-Cap Growth ETF (VOT - Free Report) tracks CRSP U.S. Mid Cap Growth Index and the iShares Russell Mid-Cap Growth ETF (IWP - Free Report) tracks Russell MidCap Growth Index. Vanguard Mid-Cap Growth ETF has $13.05 billion in assets, iShares Russell Mid-Cap Growth ETF has $13.99 billion. VOT has an expense ratio of 0.07% and IWP charges 0.23%.
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 - Mid 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 S&P MidCap 400 Pure Growth ETF (RFG) a Strong ETF Right Now?
Designed to provide broad exposure to the Style Box - Mid Cap Growth category of the market, the Invesco S&P MidCap 400 Pure Growth ETF (RFG - Free Report) is a smart beta exchange traded fund launched on 03/01/2006.
What Are Smart Beta ETFs?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.
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.
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.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
The fund is managed by Invesco. RFG has been able to amass assets over $355.63 million, making it one of the average sized ETFs in the Style Box - Mid Cap Growth. Before fees and expenses, RFG seeks to match the performance of the S&P MidCap 400 Pure Growth Index.
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.
Cost & Other Expenses
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
Operating expenses on an annual basis are 0.35% for this ETF, which makes it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 0.74%.
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.
RFG's heaviest allocation is in the Consumer Discretionary sector, which is about 22.10% of the portfolio. Its Industrials and Energy round out the top three.
Looking at individual holdings, Celsius Holdings Inc (CELH - Free Report) accounts for about 2.59% of total assets, followed by Southwestern Energy Co (SWN - Free Report) and Cnx Resources Corp (CNX - Free Report) .
RFG's top 10 holdings account for about 22.7% of its total assets under management.
Performance and Risk
The ETF has added roughly 18.57% so far this year and is up about 33.55% in the last one year (as of 06/06/2024). In the past 52-week period, it has traded between $36.89 and $50.70.
RFG has a beta of 1.15 and standard deviation of 23.23% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 84 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco S&P MidCap 400 Pure Growth ETF is a reasonable option for investors seeking to outperform the Style Box - Mid Cap Growth segment of the market. However, there are other ETFs in the space which investors could consider.
Vanguard Mid-Cap Growth ETF (VOT - Free Report) tracks CRSP U.S. Mid Cap Growth Index and the iShares Russell Mid-Cap Growth ETF (IWP - Free Report) tracks Russell MidCap Growth Index. Vanguard Mid-Cap Growth ETF has $13.05 billion in assets, iShares Russell Mid-Cap Growth ETF has $13.99 billion. VOT has an expense ratio of 0.07% and IWP charges 0.23%.
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 - Mid 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.