Should Invesco S&P SmallCap Value with Momentum ETF (XSVM) Be on Your Investing Radar?

Launched on 03/03/2005, the Invesco S&P SmallCap Value with Momentum ETF (XSVM) is a passively managed exchange traded fund designed to provide a broad exposure to the Small Cap Value segment of the US equity market.

The fund is sponsored by Invesco. It has amassed assets over $571.15 million, making it one of the average sized ETFs attempting to match the Small Cap Value segment of the US equity market.

Why Small Cap Value

There's a lot of potential to investing in small cap companies, but with market capitalization below $2 billion, that high potential comes with even higher risk.

Carrying lower than average price-to-earnings and price-to-book ratios, value stocks 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

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 0.36%, putting it on par with most peer products in the space.

It has a 12-month trailing dividend yield of 2.15%.

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 46.60% of the portfolio. Consumer Discretionary and Industrials round out the top three.

Looking at individual holdings, Stonex Group Inc (SNEX) accounts for about 2.22% of total assets, followed by World Kinect Corp (WKC) and Ezcorp Inc (EZPW).

The top 10 holdings account for about 15.95% of total assets under management.

Performance and Risk

XSVM seeks to match the performance of the S&P 600 HIGH MOMENTUM VALUE INDEX before fees and expenses. The S&P 600 High Momentum Value Index is composed of securities with strong value characteristics selected from the Russell 2000 Index.

The ETF has lost about -5.62% so far this year and is down about -2.05% in the last one year (as of 06/13/2025). In the past 52-week period, it has traded between $44.22 and $60.64.

The ETF has a beta of 1.07 and standard deviation of 23% for the trailing three-year period. With about 120 holdings, it effectively diversifies company-specific risk.

Alternatives

Invesco S&P SmallCap Value with Momentum ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, XSVM is an outstanding option for investors seeking exposure to the Style Box - Small Cap Value segment of the market. There are other additional ETFs in the space that investors could consider as well.

The iShares Russell 2000 Value ETF (IWN) and the Vanguard Small-Cap Value ETF (VBR) track a similar index. While iShares Russell 2000 Value ETF has $11.05 billion in assets, Vanguard Small-Cap Value ETF has $29.07 billion. IWN has an expense ratio of 0.24% and VBR charges 0.07%.

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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