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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.
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 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.