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Should Invesco S&P 500 Pure Value ETF (RPV) Be on Your Investing Radar?
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The Invesco S&P 500 Pure Value ETF (RPV - Free Report) was launched on 03/01/2006, and is a passively managed exchange traded fund designed to offer broad exposure to the Large Cap Value segment of the US equity market.
The fund is sponsored by Invesco. It has amassed assets over $2.05 billion, 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. They tend to be stable companies with predictable cash flows and are usually less volatile than mid and small cap companies.
Carrying lower than average price-to-earnings and price-to-book ratios, value stocks also have lower than average sales and earnings growth rates. Considering long-term performance, value stocks have outperformed growth stocks in almost all markets; however, they are more likely to underperform growth stocks in strong bull markets.
Costs
When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.
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 2.22%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. 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 32% of the portfolio. Healthcare and Consumer Discretionary round out the top three.
Looking at individual holdings, General Motors Co (GM - Free Report) accounts for about 4.30% of total assets, followed by Berkshire Hathaway Inc (BRK/B) and Mohawk Industries Inc (MHK - Free Report) .
The top 10 holdings account for about 25.77% of total assets under management.
Performance and Risk
RPV seeks to match the performance of the S&P 500 Pure Value Index before fees and expenses. The S&P 500 Pure Value Index measures the performance of securities that exhibit strong value characteristics in the S&P 500 Index.
The ETF has added about 8.77% so far this year and was up about 25.44% in the last one year (as of 10/09/2024). In the past 52-week period, it has traded between $67.85 and $89.49.
The ETF has a beta of 1.15 and standard deviation of 18.55% for the trailing three-year period, making it a medium risk choice in the space. With about 97 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco S&P 500 Pure 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, RPV is an outstanding 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 $61.86 billion in assets, Vanguard Value ETF has $127.88 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.
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Should Invesco S&P 500 Pure Value ETF (RPV) Be on Your Investing Radar?
The Invesco S&P 500 Pure Value ETF (RPV - Free Report) was launched on 03/01/2006, and is a passively managed exchange traded fund designed to offer broad exposure to the Large Cap Value segment of the US equity market.
The fund is sponsored by Invesco. It has amassed assets over $2.05 billion, 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. They tend to be stable companies with predictable cash flows and are usually less volatile than mid and small cap companies.
Carrying lower than average price-to-earnings and price-to-book ratios, value stocks also have lower than average sales and earnings growth rates. Considering long-term performance, value stocks have outperformed growth stocks in almost all markets; however, they are more likely to underperform growth stocks in strong bull markets.
Costs
When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.
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 2.22%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. 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 32% of the portfolio. Healthcare and Consumer Discretionary round out the top three.
Looking at individual holdings, General Motors Co (GM - Free Report) accounts for about 4.30% of total assets, followed by Berkshire Hathaway Inc (BRK/B) and Mohawk Industries Inc (MHK - Free Report) .
The top 10 holdings account for about 25.77% of total assets under management.
Performance and Risk
RPV seeks to match the performance of the S&P 500 Pure Value Index before fees and expenses. The S&P 500 Pure Value Index measures the performance of securities that exhibit strong value characteristics in the S&P 500 Index.
The ETF has added about 8.77% so far this year and was up about 25.44% in the last one year (as of 10/09/2024). In the past 52-week period, it has traded between $67.85 and $89.49.
The ETF has a beta of 1.15 and standard deviation of 18.55% for the trailing three-year period, making it a medium risk choice in the space. With about 97 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco S&P 500 Pure 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, RPV is an outstanding 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 $61.86 billion in assets, Vanguard Value ETF has $127.88 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.