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Should Invesco S&P SmallCap 600 Pure Value ETF (RZV) Be on Your Investing Radar?
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Launched on 03/01/2006, the Invesco S&P SmallCap 600 Pure Value ETF (RZV - Free Report) is a passively managed exchange traded fund designed to provide a broad exposure to the Small Cap Value segment of the US equity market.
The fund is sponsored by Invesco. It has amassed assets over $245.16 million, making it one of the average sized ETFs attempting to match the Small Cap Value segment of the US equity market.
Why Small Cap Value
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 value stocks have lower than average price-to-earnings and price-to-book ratios, they also have lower than average sales and earnings growth rates. Looking at their long-term performance, value stocks have outperformed growth stocks in almost all markets. They are however likely to underperform growth stocks in strong bull markets.
Costs
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
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 1.12%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Financials sector--about 21.30% of the portfolio. Consumer Discretionary and Industrials round out the top three.
Looking at individual holdings, Phinia Inc (PHIN - Free Report) accounts for about 2.02% of total assets, followed by Bread Financial Holdings Inc (BFH - Free Report) and World Kinect Corp (WKC - Free Report) .
The top 10 holdings account for about 17.23% of total assets under management.
Performance and Risk
RZV 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.
The ETF has lost about -2.08% so far this year and was up about 6.89% in the last one year (as of 08/05/2024). In the past 52-week period, it has traded between $83.38 and $112.42.
The ETF has a beta of 1.43 and standard deviation of 24.36% for the trailing three-year period, making it a high risk choice in the space. With about 140 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco S&P SmallCap 600 Pure Value ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, RZV is a good option for those seeking exposure to the Style Box - Small Cap Value area of the market. Investors might also want to consider some other ETF options in the space.
The Avantis U.S. Small Cap Value ETF (AVUV - Free Report) and the Vanguard Small-Cap Value ETF (VBR - Free Report) track a similar index. While Avantis U.S. Small Cap Value ETF has $12.29 billion in assets, Vanguard Small-Cap Value ETF has $28.42 billion. AVUV has an expense ratio of 0.25% and VBR charges 0.07%.
Bottom-Line
An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also 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 600 Pure Value ETF (RZV) Be on Your Investing Radar?
Launched on 03/01/2006, the Invesco S&P SmallCap 600 Pure Value ETF (RZV - Free Report) is a passively managed exchange traded fund designed to provide a broad exposure to the Small Cap Value segment of the US equity market.
The fund is sponsored by Invesco. It has amassed assets over $245.16 million, making it one of the average sized ETFs attempting to match the Small Cap Value segment of the US equity market.
Why Small Cap Value
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 value stocks have lower than average price-to-earnings and price-to-book ratios, they also have lower than average sales and earnings growth rates. Looking at their long-term performance, value stocks have outperformed growth stocks in almost all markets. They are however likely to underperform growth stocks in strong bull markets.
Costs
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
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 1.12%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Financials sector--about 21.30% of the portfolio. Consumer Discretionary and Industrials round out the top three.
Looking at individual holdings, Phinia Inc (PHIN - Free Report) accounts for about 2.02% of total assets, followed by Bread Financial Holdings Inc (BFH - Free Report) and World Kinect Corp (WKC - Free Report) .
The top 10 holdings account for about 17.23% of total assets under management.
Performance and Risk
RZV 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.
The ETF has lost about -2.08% so far this year and was up about 6.89% in the last one year (as of 08/05/2024). In the past 52-week period, it has traded between $83.38 and $112.42.
The ETF has a beta of 1.43 and standard deviation of 24.36% for the trailing three-year period, making it a high risk choice in the space. With about 140 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco S&P SmallCap 600 Pure Value ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, RZV is a good option for those seeking exposure to the Style Box - Small Cap Value area of the market. Investors might also want to consider some other ETF options in the space.
The Avantis U.S. Small Cap Value ETF (AVUV - Free Report) and the Vanguard Small-Cap Value ETF (VBR - Free Report) track a similar index. While Avantis U.S. Small Cap Value ETF has $12.29 billion in assets, Vanguard Small-Cap Value ETF has $28.42 billion. AVUV has an expense ratio of 0.25% and VBR charges 0.07%.
Bottom-Line
An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also 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.