If you're interested in broad exposure to the Mid Cap Value segment of the US equity market, look no further than the Invesco S&P MidCap 400 Revenue ETF (RWK), a passively managed exchange traded fund launched on 02/22/2008.
The fund is sponsored by Invesco. It has amassed assets over $816.77 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
With market capitalization between $2 billion and $10 billion, mid cap companies usually contain higher growth prospects than large cap companies, and are considered less risky than their small cap counterparts. These types of companies, then, have a good balance of stability and growth potential.
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
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
Annual operating expenses for this ETF are 0.39%, making it one of the more expensive products in the space.
It has a 12-month trailing dividend yield of 1.23%.
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.
This ETF has heaviest allocation to the Consumer Discretionary sector--about 20.90% of the portfolio. Industrials and Financials round out the top three.
Looking at individual holdings, Td Synnex Corp (SNX) accounts for about 3.02% of total assets, followed by Performance Food Group Co (PFGC) and American Airlines Group Inc (AAL).
The top 10 holdings account for about 17.29% of total assets under management.
Performance and Risk
RWK seeks to match the performance of the OFI Revenue Weighted Mid Cap Index before fees and expenses. The S&P MidCap 400 Revenue-Weighted Index is constructed using a rules-based methodology that re-weights the constituent securities of the S&P MidCap 400 Index according to the revenue earned by the companies in the parent index, subject to a maximum 5% per company weighting.
The ETF has lost about -5.09% so far this year and is down about -2.98% in the last one year (as of 03/28/2025). In the past 52-week period, it has traded between $106.43 and $126.49.
The ETF has a beta of 1.26 and standard deviation of 20.72% for the trailing three-year period, making it a medium risk choice in the space. With about 400 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco S&P MidCap 400 Revenue 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, RWK is a good option for those seeking exposure to the Style Box - Mid Cap Value area of the market. Investors might also want to consider some other ETF options in the space.
The iShares Russell Mid-Cap Value ETF (IWS) and the Vanguard Mid-Cap Value ETF (VOE) track a similar index. While iShares Russell Mid-Cap Value ETF has $13.46 billion in assets, Vanguard Mid-Cap Value ETF has $17.43 billion. IWS has an expense ratio of 0.23% and VOE charges 0.07%.
Bottom-Line
An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also 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 MidCap 400 Revenue ETF (RWK): ETF Research Reports TD SYNNEX Corporation (SNX): Free Stock Analysis Report American Airlines Group Inc. (AAL): Free Stock Analysis Report Performance Food Group Company (PFGC): Free Stock Analysis Report Vanguard Mid-Cap Value ETF (VOE): ETF Research Reports iShares Russell Mid-Cap Value ETF (IWS): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).
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