Is Invesco S&P MidCap 400 Pure Growth ETF (RFG) a Strong ETF Right Now?

A smart beta exchange traded fund, the Invesco S&P MidCap 400 Pure Growth ETF (RFG) debuted on 03/01/2006, and offers broad exposure to the Style Box - Mid Cap Growth category of the market.

What Are Smart Beta ETFs?

The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.

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.

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.

Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.

This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.

Fund Sponsor & Index

RFG is managed by Invesco, and this fund has amassed over $289.39 million, which makes it one of the average sized ETFs in the Style Box - Mid Cap Growth. Before fees and expenses, RFG seeks to match the performance of the S&P MidCap 400 Pure Growth Index.

The S&P MidCap 400 Pure Growth Index measures the performance of securities that exhibit strong growth characteristics in the S&P MidCap 400 Index.

Cost & Other Expenses

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 cousins, other things remaining the same.

Annual operating expenses for RFG are 0.35%, which makes it on par with most peer products in the space.

It's 12-month trailing dividend yield comes in at 0.35%.

Sector Exposure and Top Holdings

ETFs offer 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 in the Industrials sector - about 34.8% of the portfolio. Healthcare and Consumer Discretionary round out the top three.

When you look at individual holdings, Comfort Systems Usa Inc (FIX) accounts for about 4.15% of the fund's total assets, followed by Roivant Sciences Ltd (ROIV) and Carpenter Technology Corp (CRS).

Its top 10 holdings account for approximately 23.72% of RFG's total assets under management.

Performance and Risk

Year-to-date, the Invesco S&P MidCap 400 Pure Growth ETF has added roughly 0% so far, and it's up approximately 8.67% over the last 12 months (as of 01/01/2026). RFG has traded between $39.08 $53.67 in this past 52-week period.

RFG has a beta of 1.13 and standard deviation of 19.42% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 99 holdings, it effectively diversifies company-specific risk .

Alternatives

Invesco S&P MidCap 400 Pure Growth ETF is an excellent option for investors seeking to outperform the Style Box - Mid Cap Growth segment of the market. There are other ETFs in the space which investors could consider as well.

Vanguard Mid-Cap Growth ETF (VOT) tracks CRSP U.S. Mid Cap Growth Index and the iShares Russell Mid-Cap Growth ETF (IWP) tracks Russell MidCap Growth Index. Vanguard Mid-Cap Growth ETF has $17.67 billion in assets, iShares Russell Mid-Cap Growth ETF has $20.44 billion. VOT has an expense ratio of 0.07% and IWP changes 0.23%.

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 - Mid Cap Growth

Bottom Line

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This article originally published on Zacks Investment Research (zacks.com).

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