Is Invesco S&P 500 Pure Value ETF (RPV) a Strong ETF Right Now?

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A smart beta exchange traded fund, the Invesco S&P 500 Pure Value ETF (RPV) debuted on 03/01/2006, and offers broad exposure to the Style Box – Large Cap Value category of the market.

What Are Smart Beta ETFs?

Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.

Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.

If you’re the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.

These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.

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

Because the fund has amassed over $2.84 billion, this makes it one of the average sized ETFs in the Style Box – Large Cap Value. RPV is managed by Invesco. This particular fund, before fees and expenses, seeks to match the performance of the S&P 500 Pure Value Index.

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.

Operating expenses on an annual basis are 0.35% for this ETF, which makes it on par with most peer products in the space.

The fund has a 12-month trailing dividend yield of 1.90%.

Sector Exposure and Top Holdings

Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it’s still important for investors to research a fund’s holdings.

This ETF has heaviest allocation in the Financials sector – about 42.90% of the portfolio. Consumer Discretionary and Healthcare round out the top three.

When you look at individual holdings, Ford Motor Co (F) accounts for about 2.46% of the fund’s total assets, followed by Berkshire Hathaway Inc (BRK/B) and Lincoln National Corp (LNC).

RPV’s top 10 holdings account for about 19.22% of its total assets under management.

Performance and Risk

The ETF has gained about 0% and is up about 35.78% so far this year and in the past one year (as of 01/04/2022), respectively. RPV has traded between $61.26 and $82.01 during this last 52-week period.

RPV has a beta of 1.33 and standard deviation of 31.10% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 119 holdings, it effectively diversifies company-specific risk.

Alternatives

Invesco S&P 500 Pure Value ETF is a reasonable option for investors seeking to outperform the Style Box – Large Cap Value segment of the market. However, there are other ETFs in the space which investors could consider.

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 $60.19 billion in assets, Vanguard Value ETF has $92.61 billion. IWD has an expense ratio of 0.19% 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
 
Ford Motor Company (F) : Free Stock Analysis Report
 
Lincoln National Corporation (LNC) : Free Stock Analysis Report
 
Vanguard Value ETF (VTV): ETF Research Reports
 
iShares Russell 1000 Value ETF (IWD): ETF Research Reports
 
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