Is Invesco S&P 500 Pure Value ETF (RPV) a Strong ETF Right Now?
The Invesco S&P 500 Pure Value ETF (RPV) made its debut on 03/01/2006, and is a smart beta exchange traded fund that provides broad exposure to the Style Box - Large Cap Value category of the market.
What Are Smart Beta ETFs?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
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.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
Managed by Invesco, RPV has amassed assets over $3.76 billion, making it one of the average sized ETFs in the Style Box - Large Cap Value. This particular fund 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.
Cost & Other Expenses
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.
Annual operating expenses for this ETF are 0.35%, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 2.11%.
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.
RPV's heaviest allocation is in the Financials sector, which is about 21.70% of the portfolio. Its Consumer Discretionary and Telecom round out the top three.
Taking into account individual holdings, Lumen Technologies Inc (LUMN) accounts for about 3.36% of the fund's total assets, followed by Paramount Global (PARA) and Dish Network Corp (DISH).
Its top 10 holdings account for approximately 23.85% of RPV's total assets under management.
Performance and Risk
So far this year, RPV return is roughly 8.39%, and is down about -0.12% in the last one year (as of 01/17/2023). During this past 52-week period, the fund has traded between $69.84 and $88.24.
The ETF has a beta of 1.15 and standard deviation of 32.39% for the trailing three-year period, making it a medium risk choice in the space. With about 88 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco S&P 500 Pure Value ETF is an excellent option for investors seeking to outperform the Style Box - Large Cap Value segment of the market. There are other ETFs in the space which investors could consider as well.
IShares Russell 1000 Value ETF (IWD) tracks Russell 1000 Value Index and the Vanguard Value ETF (VTV) tracks CRSP U.S. Large Cap Value Index. IShares Russell 1000 Value ETF has $55.53 billion in assets, Vanguard Value ETF has $100.80 billion. IWD has an expense ratio of 0.18% and VTV charges 0.04%.
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 - Large 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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Invesco S&P 500 Pure Value ETF (RPV): ETF Research Reports
DISH Network Corporation (DISH) : Free Stock Analysis Report
Vanguard Value ETF (VTV): ETF Research Reports
iShares Russell 1000 Value ETF (IWD): ETF Research Reports
Lumen Technologies, Inc. (LUMN) : Free Stock Analysis Report
Paramount Global (PARA) : Free Stock Analysis Report
