Yahoo Finance Should Invesco S&P MidCap 400 Pure Growth ETF (RFG) Be on Your Investing Radar?
If you're interested in broad exposure to the Mid Cap Growth segment of the US equity market, look no further than the Invesco S&P MidCap 400 Pure Growth ETF (RFG), a passively managed exchange traded fund launched on 03/01/2006.
The fund is sponsored by Invesco. It has amassed assets over $354.68 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. These types of companies, then, have a good balance of stability and growth potential.
While growth stocks do boast higher than average sales and earnings growth rates, and they are expected to grow faster than the wider market, investors should note these kinds of stocks have higher valuations. Further, growth stocks have a higher level of volatility associated with them. Even though growth stocks are more likely to outperform their value counterparts in strong bull markets, value stocks have a record of delivering better returns in almost all markets than growth stocks.
Costs
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are the same.
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 0.55%.
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 Consumer Discretionary sector--about 22.50% of the portfolio. Industrials and Energy round out the top three.
Looking at individual holdings, Celsius Holdings Inc (CELH) accounts for about 2.59% of total assets, followed by Southwestern Energy Co (SWN) and Cnx Resources Corp (CNX).
The top 10 holdings account for about 22.7% 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 18.26% so far this year and it's up approximately 29.28% in the last one year (as of 06/24/2024). In the past 52-week period, it has traded between $36.89 and $50.70.
The ETF has a beta of 1.15 and standard deviation of 23.25% for the trailing three-year period, making it a medium risk choice in the space. With about 84 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco S&P MidCap 400 Pure Growth 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, RFG is a reasonable option for those seeking exposure to the Style Box - Mid Cap Growth area of the market. Investors might also want to consider some other ETF options in the space.
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 $13.22 billion in assets, iShares Russell Mid-Cap Growth ETF has $14.18 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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Invesco S&P MidCap 400 Pure Growth ETF (RFG): ETF Research Reports
Southwestern Energy Company (SWN) : Free Stock Analysis Report
CNX Resources Corporation. (CNX) : Free Stock Analysis Report
iShares Russell Mid-Cap Growth ETF (IWP): ETF Research Reports
Vanguard Mid-Cap Growth ETF (VOT): ETF Research Reports
Celsius Holdings Inc. (CELH) : Free Stock Analysis Report
