Yahoo Finance Should Invesco Russell 1000 Dynamic Multifactor ETF (OMFL) Be on Your Investing Radar?
Looking for broad exposure to the Large Cap Growth segment of the US equity market? You should consider the Invesco Russell 1000 Dynamic Multifactor ETF (OMFL), a passively managed exchange traded fund launched on 11/08/2017.
The fund is sponsored by Invesco. It has amassed assets over $5.98 billion, making it one of the larger ETFs attempting to match the Large Cap Growth segment of the US equity market.
Why Large Cap Growth
Large cap companies usually have a market capitalization above $10 billion. Overall, they are usually a stable option, with less risk and more sure-fire cash flows than mid and small cap companies.
Qualities of growth stocks include faster growth rates compared to the broader market, as well as higher valuations and higher than average sales and earnings growth rates. Additionally, growth stocks have a greater level of risk associated with them. When you consider growth versus value, growth stocks are usually the clear winner in strong bull markets but tend to fall flat in nearly all other environments.
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 0.29%, putting it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.54%.
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 22.60% of the portfolio. Industrials and Consumer Discretionary round out the top three.
Looking at individual holdings, Hewlett Packard Enterprise Co (HPE) accounts for about 1.25% of total assets, followed by Western Digital Corp (WDC) and Williams-Sonoma Inc (WSM).
The top 10 holdings account for about 9.09% of total assets under management.
Performance and Risk
OMFL seeks to match the performance of the RUSSELL 1000 INVESCO DYNAMIC MLTIFCTR ID before fees and expenses. The Russell 1000 Invesco Dynamic Multifactor Index is constructed using a rules-based methodology by selecting equity securities from the Russell 1000 Index, which measures the performance of the 1,000 largest-capitalization companies in the United States.
The ETF has gained about 2.23% so far this year and is up about 8.37% in the last one year (as of 07/05/2024). In the past 52-week period, it has traded between $43.21 and $55.23.
The ETF has a beta of 1.01 and standard deviation of 17.51% for the trailing three-year period. With about 377 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco Russell 1000 Dynamic Multifactor 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, OMFL is a sufficient option for those seeking exposure to the Style Box - Large Cap Growth area of the market. Investors might also want to consider some other ETF options in the space.
The Vanguard Growth ETF (VUG) and the Invesco QQQ (QQQ) track a similar index. While Vanguard Growth ETF has $137.10 billion in assets, Invesco QQQ has $295.31 billion. VUG has an expense ratio of 0.04% and QQQ charges 0.20%.
Bottom-Line
An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they 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 Russell 1000 Dynamic Multifactor ETF (OMFL): ETF Research Reports
Western Digital Corporation (WDC) : Free Stock Analysis Report
Williams-Sonoma, Inc. (WSM) : Free Stock Analysis Report
Invesco QQQ (QQQ): ETF Research Reports
Hewlett Packard Enterprise Company (HPE) : Free Stock Analysis Report
Vanguard Growth ETF (VUG): ETF Research Reports
