The Invesco S&P 500 Pure Value ETF (RPV) made its debut on 03/01/2006, and is a smart beta exchange traded fund that provides broad exposure to the Style Box - Large Cap Value category of the market.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix 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
RPV is managed by Invesco, and this fund has amassed over $1.26 billion, which makes it one of the average sized ETFs in the Style Box - Large Cap Value. 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.
Cost & Other Expenses
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
With on par with most peer products in the space, this ETF has annual operating expenses of 0.35%.
The fund has a 12-month trailing dividend yield of 2.41%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
For RPV, it has heaviest allocation in the Healthcare sector --about 20.60% of the portfolio --while Consumer Staples and Financials round out the top three.
Taking into account individual holdings, Cvs Health Corp (CVS) accounts for about 3.15% of the fund's total assets, followed by Centene Corp (CNC) and General Motors Co (GM).
The top 10 holdings account for about 21.4% of total assets under management.
Performance and Risk
Year-to-date, the Invesco S&P 500 Pure Value ETF has lost about -3.41% so far, and it's up approximately 6.20% over the last 12 months (as of 04/15/2025). RPV has traded between $81.66 and $97.21 in this past 52-week period.
The fund has a beta of 0.96 and standard deviation of 18.88% for the trailing three-year period, which makes RPV a medium risk choice in this particular space. With about 111 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco S&P 500 Pure Value ETF is a reasonable option for investors seeking to outperform the Style Box - Large Cap Value segment of the market. However, there are other ETFs in the space which investors could consider.
Schwab U.S. Dividend Equity ETF (SCHD) tracks Dow Jones U.S. Dividend 100 Index and the Vanguard Value ETF (VTV) tracks CRSP U.S. Large Cap Value Index. Schwab U.S. Dividend Equity ETF has $66.21 billion in assets, Vanguard Value ETF has $127.95 billion. SCHD has an expense ratio of 0.06% and VTV charges 0.04%.
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 - Large 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 500 Pure Value ETF (RPV): ETF Research Reports CVS Health Corporation (CVS): Free Stock Analysis Report General Motors Company (GM): Free Stock Analysis Report Centene Corporation (CNC): Free Stock Analysis Report Vanguard Value ETF (VTV): ETF Research Reports Schwab U.S. Dividend Equity ETF (SCHD): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).
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