Should Invesco S&P SmallCap 600 Revenue ETF (RWJ) Be on Your Investing Radar?

Designed to provide broad exposure to the Small Cap Blend segment of the US equity market, the Invesco S&P SmallCap 600 Revenue ETF (RWJ) is a passively managed exchange traded fund launched on 02/22/2008.

The fund is sponsored by Invesco. It has amassed assets over $1.52 billion, making it one of the larger ETFs attempting to match the Small Cap Blend segment of the US equity market.

Why Small Cap Blend

With more potential comes more risk, and small cap companies, with market capitalization below $2 billion, epitomizes this way of thinking.

Blend ETFs usually hold a mix of growth and value stocks as well as stocks that exhibit both value and growth characteristics.

Costs

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 counterparts, other things remaining the same.

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 1.23%.

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 Consumer Discretionary sector--about 25.90% of the portfolio. Industrials and Financials round out the top three.

Looking at individual holdings, World Kinect Corp (WKC) accounts for about 3.14% of total assets, followed by United Natural Foods Inc (UNFI) and Group 1 Automotive Inc (GPI).

The top 10 holdings account for about 14.91% of total assets under management.

Performance and Risk

RWJ seeks to match the performance of the OFI Revenue Weighted Small Cap Index before fees and expenses. The S&P SmallCap 600 Revenue-Weighted Index is constructed using a rules-based methodology that re-weights the constituent securities of the S&P SmallCap 600 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 -6.73% so far this year and is up about 2.10% in the last one year (as of 05/19/2025). In the past 52-week period, it has traded between $34.78 and $49.46.

The ETF has a beta of 1.18 and standard deviation of 24.70% for the trailing three-year period, making it a high risk choice in the space. With about 602 holdings, it effectively diversifies company-specific risk.

Alternatives

Invesco S&P SmallCap 600 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, RWJ is a reasonable option for those seeking exposure to the Style Box - Small Cap Blend area of the market. Investors might also want to consider some other ETF options in the space.

The iShares Russell 2000 ETF (IWM) and the iShares Core S&P Small-Cap ETF (IJR) track a similar index. While iShares Russell 2000 ETF has $64.30 billion in assets, iShares Core S&P Small-Cap ETF has $79.31 billion. IWM has an expense ratio of 0.19% and IJR charges 0.06%.

Bottom-Line

While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.

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

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