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Designed to provide broad exposure to the Mid Cap Value segment of the US equity market, the Invesco S&P MidCap Value with Momentum ETF (XMVM) is a passively managed exchange traded fund launched on 03/03/2005.
The fund is sponsored by Invesco. It has amassed assets over $256.82 million, making it one of the average sized ETFs attempting to match the Mid Cap Value segment of the US equity market.
Why Mid Cap Value
Mid cap companies have market capitalization between $2 billion and $10 billion. They usually have higher growth prospects than large cap companies and are less volatile than small cap companies. These types of companies, then, have a good balance of stability and growth potential.
Value stocks are known for their lower than average price-to-earnings and price-to-book ratios, but investors should also note their 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
Expense ratios are an important factor in the return of an ETF and in the long term, cheaper funds can significantly outperform their more expensive counterparts, other things remaining the same.
Annual operating expenses for this ETF are 0.39%, putting it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.41%.
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 33.50% of the portfolio. Materials and Consumer Discretionary round out the top three.
Looking at individual holdings, United States Steel Corp (X) accounts for about 3.83% of total assets, followed by Avnet Inc (AVT) and Cleveland-Cliffs Inc (CLF).
The top 10 holdings account for about 22.31% of total assets under management.
Performance and Risk
XMVM seeks to match the performance of the S&P MIDCAP 400 HIGH MOMENTUM VALUE INDEX before fees and expenses. The S&P MidCap 400 High Momentum Value Index is composed of securities with strong value characteristics selected from the Russell Midcap Index.
The ETF has lost about -8.47% so far this year and is down about -6.05% in the last one year (as of 05/09/2022). In the past 52-week period, it has traded between $42.39 and $50.28.
The ETF has a beta of 1.09 and standard deviation of 31.43% for the trailing three-year period. With about 81 holdings, it effectively diversifies company-specific risk.