Launched on 03/01/2006, the Invesco S&P 500 Pure Value ETF (RPV) 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 $3.75 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. Considered a more stable option, large cap companies boast more predictable cash flows and are less volatile than their mid and small cap counterparts.
Carrying lower than average price-to-earnings and price-to-book ratios, value stocks also have 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.
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 1.71%.
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 29.80% of the portfolio. Healthcare and Consumer Staples round out the top three.
Looking at individual holdings, Berkshire Hathaway Inc (BRK/B) accounts for about 2.27% of total assets, followed by Cigna Corp (CI) and Prudential Financial Inc (PRU).
The top 10 holdings account for about 17.96% 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 lost about -0.52% so far this year and is up about 2.27% in the last one year (as of 05/11/2022). In the past 52-week period, it has traded between $72.23 and $88.24.
The ETF has a beta of 1.20 and standard deviation of 31.48% for the trailing three-year period, making it a medium risk choice in the space. With about 124 holdings, it effectively diversifies company-specific risk.
Invesco S&P 500 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, RPV is a sufficient option for those seeking exposure to the Style Box – Large Cap Value area of the market. Investors might also want to consider some other ETF options in the space.
The iShares Russell 1000 Value ETF (IWD) and the Vanguard Value ETF (VTV) track a similar index. While iShares Russell 1000 Value ETF has $52.45 billion in assets, Vanguard Value ETF has $96.34 billion. IWD has an expense ratio of 0.19% and VTV charges 0.04%.
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are 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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Invesco S&P 500 Pure Value ETF (RPV): ETF Research Reports
Prudential Financial, Inc. (PRU) : Free Stock Analysis Report
Cigna Corporation (CI) : Free Stock Analysis Report
Vanguard Value ETF (VTV): ETF Research Reports
iShares Russell 1000 Value ETF (IWD): ETF Research Reports
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