Yahoo Finance Is Invesco S&P 500 Pure Growth ETF (RPG) a Strong ETF Right Now?
A smart beta exchange traded fund, the Invesco S&P 500 Pure Growth ETF (RPG) debuted on 03/01/2006, and offers broad exposure to the Style Box - Large 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 work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.
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.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
The fund is managed by Invesco. RPG has been able to amass assets over $1.56 billion, making it one of the average sized ETFs in the Style Box - Large Cap Growth. RPG seeks to match the performance of the S&P 500 Pure Growth Index before fees and expenses.
The S&P 500 Pure Growth Index measures the performance of securities that exhibit strong growth characteristics in the S&P 500 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 this ETF are 0.35%, making it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 0.92%.
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.
RPG's heaviest allocation is in the Information Technology sector, which is about 39.50% of the portfolio. Its Consumer Discretionary and Industrials round out the top three.
When you look at individual holdings, Nvidia Corp (NVDA) accounts for about 3.91% of the fund's total assets, followed by Arista Networks Inc (ANET) and Uber Technologies Inc (UBER).
The top 10 holdings account for about 26.31% of total assets under management.
Performance and Risk
The ETF return is roughly 10.34% and it's up approximately 22.28% so far this year and in the past one year (as of 05/24/2024), respectively. RPG has traded between $28.71 and $36.93 during this last 52-week period.
RPG has a beta of 1.11 and standard deviation of 22.92% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 63 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco S&P 500 Pure Growth ETF is an excellent option for investors seeking to outperform the Style Box - Large Cap Growth segment of the market. There are other ETFs in the space which investors could consider as well.
Vanguard Growth ETF (VUG) tracks CRSP U.S. Large Cap Growth Index and the Invesco QQQ (QQQ) tracks NASDAQ-100 Index. Vanguard Growth ETF has $123.90 billion in assets, Invesco QQQ has $268.49 billion. VUG has an expense ratio of 0.04% and QQQ charges 0.20%.
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 - Large Cap Growth.
Bottom Line
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 500 Pure Growth ETF (RPG): ETF Research Reports
NVIDIA Corporation (NVDA) : Free Stock Analysis Report
Invesco QQQ (QQQ): ETF Research Reports
Arista Networks, Inc. (ANET) : Free Stock Analysis Report
Vanguard Growth ETF (VUG): ETF Research Reports
Uber Technologies, Inc. (UBER) : Free Stock Analysis Report
