If you're interested in broad exposure to the Large Cap Value segment of the US equity market, look no further than the Invesco S&P Ultra Dividend Revenue ETF (RDIV), a passively managed exchange traded fund launched on October 1, 2013.
The fund is sponsored by Invesco. It has amassed assets over $793.74 million, 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
Companies that find themselves in the large cap category 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.
Value stocks have lower than average price-to-earnings and price-to-book ratios. They also have lower than average sales and earnings growth rates. Looking at their long-term performance, value stocks have outperformed growth stocks in almost all markets. They are however likely to underperform growth stocks in strong bull markets.
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 0.39%, putting it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 4.1%.
Sector Exposure and Top Holdings
ETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Financials sector -- about 26.6% of the portfolio. Energy and Healthcare round out the top three.
Looking at individual holdings, Us Bancorp (USB) accounts for about 5.55% of total assets, followed by Best Buy Co Inc (BBY) and Chevron Corp (CVX).
The top 10 holdings account for about 47.7% of total assets under management.
Performance and Risk
RDIV seeks to match the performance of the OFI Revenue Weighted Ultra Dividend Index before fees and expenses. The S&P 900 Dividend Revenue-Weighted Index is constructed using a rules-based methodology that starts with the S&P 900 Index, subject to a maximum 5% per company weighting.
The ETF has added about 2.45% so far this year and it's up approximately 9.91% in the last one year (as of 08/06/2025). In the past 52-week period, it has traded between $42.44 and $52.79.
The ETF has a beta of 0.93 and standard deviation of 18.85% for the trailing three-year period, making it a medium risk choice in the space. With about 61 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco S&P Ultra Dividend 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, RDIV is a sufficient option for those seeking exposure to the Style Box - Large Cap Value area of the market. Investors might also want to consider some other ETF options in the space.
The Schwab U.S. Dividend Equity ETF (SCHD) and the Vanguard Value ETF (VTV) track a similar index. While Schwab U.S. Dividend Equity ETF has $69.62 billion in assets, Vanguard Value ETF has $138.82 billion. SCHD has an expense ratio of 0.06% and VTV charges 0.04%.
Bottom-Line
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are 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 Ultra Dividend Revenue ETF (RDIV): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).
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