A smart beta exchange traded fund, the Invesco S&P SmallCap 600 Pure Value ETF (RZV) debuted on 03/01/2006, and offers broad exposure to the Style Box - Small Cap Value category of the market.
What Are Smart Beta ETFs?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.
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.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
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.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
The fund is sponsored by Invesco. It has amassed assets over $209.5 million, making it one of the average sized ETFs in the Style Box - Small Cap Value. RZV, before fees and expenses, seeks to match the performance of the S&P SmallCap 600 Pure Value Index.
The S&P SmallCap 600 Pure Value Index measures the performance of securities that exhibit strong value characteristics in the S&P SmallCap 600 Index.
Cost & Other Expenses
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
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 0.96%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
For RZV, it has heaviest allocation in the Consumer Discretionary sector --about 26.9% of the portfolio --while Financials and Energy round out the top three.
Taking into account individual holdings, Par Pacific Holdings Inc (PARR) accounts for about 2.49% of the fund's total assets, followed by Dana Inc (DAN) and Titan International Inc (TWI).
Its top 10 holdings account for approximately 17.72% of RZV's total assets under management.
Performance and Risk
Year-to-date, the Invesco S&P SmallCap 600 Pure Value ETF has lost about -2.68% so far, and is up about 4.65% over the last 12 months (as of 07/16/2025). RZV has traded between $83.11 and $119.36 in this past 52-week period.
The ETF has a beta of 1.20 and standard deviation of 24.59% for the trailing three-year period, making it a high risk choice in the space. With about 147 holdings, it effectively diversifies company-specific risk .
Alternatives
Invesco S&P SmallCap 600 Pure Value ETF is a reasonable option for investors seeking to outperform the Style Box - Small Cap Value segment of the market. However, there are other ETFs in the space which investors could consider.
iShares Russell 2000 Value ETF (IWN) tracks Russell 2000 Value Index and the Vanguard Small-Cap Value ETF (VBR) tracks CRSP U.S. Small Cap Value Index. iShares Russell 2000 Value ETF has $10.87 billion in assets, Vanguard Small-Cap Value ETF has $29.86 billion. IWN has an expense ratio of 0.24% and VBR changes 0.07%.
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 - Small 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 SmallCap 600 Pure Value ETF (RZV): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).
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