Back to top

Image: Bigstock

Should Invesco Large Cap Value ETF (PWV) Be on Your Investing Radar?

Read MoreHide Full Article

Launched on 03/03/2005, the Invesco Large Cap Value ETF (PWV - Free Report) is a passively managed exchange traded fund designed to provide a broad exposure to the Large Cap Value segment of the US equity market.

The fund is sponsored by Invesco. It has amassed assets over $980.53 million, making it one of the average sized ETFs attempting to match the Large Cap Value segment of the US equity market.

Why Large Cap Value

Large cap companies typically have a market capitalization above $10 billion. Overall, they are usually a stable option, with less risk and more sure-fire cash flows than mid and small cap companies.

Value stocks are known for their lower than average price-to-earnings and price-to-book ratios, but investors should also note their lower than average sales and earnings growth rates. When you look at long-term performance, value stocks have outperformed growth stocks in nearly all markets. But in strong bull markets, growth stocks are more likely to be winners.

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 0.55%, making it one of the more expensive products in the space.

It has a 12-month trailing dividend yield of 1.91%.

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.

This ETF has heaviest allocation to the Financials sector--about 27.50% of the portfolio. Healthcare and Energy round out the top three.

Looking at individual holdings, Abbvie Inc (ABBV - Free Report) accounts for about 4% of total assets, followed by Johnson & Johnson (JNJ - Free Report) and Amgen Inc (AMGN - Free Report) .

The top 10 holdings account for about 35.44% of total assets under management.

Performance and Risk

PWV seeks to match the performance of the Dynamic Large Cap Value Intellidex Index before fees and expenses. The Dynamic Large Cap Value Intellidex Index is designed to provide capital appreciation while maintaining consistent stylistically accurate exposure.

The ETF has gained about 16.05% so far this year and is up about 25.58% in the last one year (as of 08/27/2024). In the past 52-week period, it has traded between $44.09 and $58.30.

The ETF has a beta of 0.86 and standard deviation of 14.62% for the trailing three-year period, making it a medium risk choice in the space. With about 52 holdings, it effectively diversifies company-specific risk.

Alternatives

Invesco Large Cap Value 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, PWV is an excellent option for investors seeking exposure to the Style Box - Large Cap Value segment of the market. There are other additional ETFs in the space that investors could consider as well.

The Schwab U.S. Dividend Equity ETF (SCHD - Free Report) and the Vanguard Value ETF (VTV - Free Report) track a similar index. While Schwab U.S. Dividend Equity ETF has $59.81 billion in assets, Vanguard Value ETF has $123.96 billion. SCHD has an expense ratio of 0.06% and VTV charges 0.04%.

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.

Published in