Should Invesco S&P MidCap 400 Pure Growth ETF (RFG) Be on Your Investing Radar?

Designed to provide broad exposure to the Mid Cap Growth segment of the US equity market, the Invesco S&P MidCap 400 Pure Growth ETF (RFG) is a passively managed exchange traded fund launched on 03/01/2006.

The fund is sponsored by Invesco. It has amassed assets over $292.82 million, making it one of the average sized ETFs attempting to match the Mid Cap Growth segment of the US equity market.

Why Mid Cap Growth

Mid cap companies have market capitalization between $2 billion and $10 billion. They usually have higher growth prospects than large cap companies and are less volatile than small cap companies. Thus they have a nice balance of growth potential and stability.

Growth stocks have higher than average sales and earnings growth rates. While these are expected to grow faster than the broader market, they also have higher valuations. Further, growth stocks have a higher level of volatility associated with them. They are likely to outperform value stocks in strong bull markets but over the longer-term, value stocks have delivered better returns than growth stocks in almost all 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 0.35%, putting it on par with most peer products in the space.

It has a 12-month trailing dividend yield of 0.44%.

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.

This ETF has heaviest allocation to the Industrials sector--about 29.90% of the portfolio. Consumer Discretionary and Healthcare round out the top three.

Looking at individual holdings, Hims & Hers Health Inc (HIMS) accounts for about 3.30% of total assets, followed by Carpenter Technology Corp (CRS) and Comfort Systems Usa Inc (FIX).

The top 10 holdings account for about 21.05% of total assets under management.

Performance and Risk

RFG seeks to match the performance of the S&P MidCap 400 Pure Growth Index before fees and expenses. 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.

The ETF has added roughly 2.22% so far this year and is up about 2.45% in the last one year (as of 07/09/2025). In the past 52-week period, it has traded between $39.08 and $53.39.

The ETF has a beta of 1.09 and standard deviation of 21.96% for the trailing three-year period, making it a medium risk choice in the space. With about 94 holdings, it effectively diversifies company-specific risk.

Alternatives

Invesco S&P MidCap 400 Pure Growth 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, RFG is a great option for investors seeking exposure to the Style Box - Mid Cap Growth segment of the market. There are other additional ETFs in the space that investors could consider as well.

The Vanguard Mid-Cap Growth ETF (VOT) and the iShares Russell Mid-Cap Growth ETF (IWP) track a similar index. While Vanguard Mid-Cap Growth ETF has $17.27 billion in assets, iShares Russell Mid-Cap Growth ETF has $19.40 billion. VOT has an expense ratio of 0.07% and IWP charges 0.23%.

Bottom-Line

Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also 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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This article originally published on Zacks Investment Research (zacks.com).

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