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Is Invesco S&P SmallCap 600 Pure Value ETF (RZV) a Strong ETF Right Now?
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Launched on 03/01/2006, the Invesco S&P SmallCap 600 Pure Value ETF (RZV - Free Report) is a smart beta exchange traded fund offering broad exposure to the Style Box - Small Cap Value category of the market.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
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.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
The fund is managed by Invesco, and has been able to amass over $249.89 million, which makes it one of the average sized ETFs in the Style Box - Small Cap Value. This particular fund seeks to match the performance of the S&P SmallCap 600 Pure Value Index before fees and expenses.
The S&P SmallCap 600 Pure Value Index measures the performance of securities that exhibit strong value characteristics in the S&P SmallCap 600 Index.
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.
With on par with most peer products in the space, this ETF has annual operating expenses of 0.35%.
RZV's 12-month trailing dividend yield is 1.18%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
For RZV, it has heaviest allocation in the Consumer Discretionary sector --about 19.40% of the portfolio --while Financials and Industrials round out the top three.
Taking into account individual holdings, Jetblue Airways Corp (JBLU - Free Report) accounts for about 2.02% of the fund's total assets, followed by World Kinect Corp (WKC - Free Report) and Phinia Inc (PHIN - Free Report) .
The top 10 holdings account for about 16.39% of total assets under management.
Performance and Risk
The ETF has lost about -3.44% and is up roughly 15.10% so far this year and in the past one year (as of 06/07/2024), respectively. RZV has traded between $83.38 and $108.67 during this last 52-week period.
The ETF has a beta of 1.44 and standard deviation of 24.57% for the trailing three-year period, making it a high risk choice in the space. With about 144 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco S&P SmallCap 600 Pure Value ETF is a reasonable option for investors seeking to outperform the Style Box - Small Cap Value segment of the market. However, there are other ETFs in the space which investors could consider.
IShares Russell 2000 Value ETF (IWN - Free Report) tracks Russell 2000 Value Index and the Vanguard Small-Cap Value ETF (VBR - Free Report) tracks CRSP U.S. Small Cap Value Index. IShares Russell 2000 Value ETF has $11.52 billion in assets, Vanguard Small-Cap Value ETF has $28.05 billion. IWN has an expense ratio of 0.24% and VBR charges 0.07%.
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 - Small 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 SmallCap 600 Pure Value ETF (RZV) a Strong ETF Right Now?
Launched on 03/01/2006, the Invesco S&P SmallCap 600 Pure Value ETF (RZV - Free Report) is a smart beta exchange traded fund offering broad exposure to the Style Box - Small Cap Value category of the market.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
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.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
The fund is managed by Invesco, and has been able to amass over $249.89 million, which makes it one of the average sized ETFs in the Style Box - Small Cap Value. This particular fund seeks to match the performance of the S&P SmallCap 600 Pure Value Index before fees and expenses.
The S&P SmallCap 600 Pure Value Index measures the performance of securities that exhibit strong value characteristics in the S&P SmallCap 600 Index.
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.
With on par with most peer products in the space, this ETF has annual operating expenses of 0.35%.
RZV's 12-month trailing dividend yield is 1.18%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
For RZV, it has heaviest allocation in the Consumer Discretionary sector --about 19.40% of the portfolio --while Financials and Industrials round out the top three.
Taking into account individual holdings, Jetblue Airways Corp (JBLU - Free Report) accounts for about 2.02% of the fund's total assets, followed by World Kinect Corp (WKC - Free Report) and Phinia Inc (PHIN - Free Report) .
The top 10 holdings account for about 16.39% of total assets under management.
Performance and Risk
The ETF has lost about -3.44% and is up roughly 15.10% so far this year and in the past one year (as of 06/07/2024), respectively. RZV has traded between $83.38 and $108.67 during this last 52-week period.
The ETF has a beta of 1.44 and standard deviation of 24.57% for the trailing three-year period, making it a high risk choice in the space. With about 144 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco S&P SmallCap 600 Pure Value ETF is a reasonable option for investors seeking to outperform the Style Box - Small Cap Value segment of the market. However, there are other ETFs in the space which investors could consider.
IShares Russell 2000 Value ETF (IWN - Free Report) tracks Russell 2000 Value Index and the Vanguard Small-Cap Value ETF (VBR - Free Report) tracks CRSP U.S. Small Cap Value Index. IShares Russell 2000 Value ETF has $11.52 billion in assets, Vanguard Small-Cap Value ETF has $28.05 billion. IWN has an expense ratio of 0.24% and VBR charges 0.07%.
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 - Small 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.