Should Invesco S&P 500 Pure Growth ETF (RPG) Be on Your Investing Radar?
Style Box ETF report for RPG
Looking for broad exposure to the Large Cap Growth segment of the US equity market? You should consider the Invesco S&P 500 Pure Growth ETF (RPG), a passively managed exchange traded fund launched on 03/01/2006.
The fund is sponsored by Invesco. It has amassed assets over $3.39 billion, making it one of the average sized 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. They tend to be stable companies with predictable cash flows and are usually less volatile than mid and small cap companies.
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. Also, growth stocks are a type of equity that carries more risk compared to others. Compared to value stocks, growth stocks are a safer bet in a strong bull market, but don't perform as strongly in almost all other financial environments.
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%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Information Technology sector--about 41% of the portfolio. Healthcare and Consumer Discretionary round out the top three.
Looking at individual holdings, Tesla Inc (TSLA) accounts for about 2.94% of total assets, followed by Nvidia Corp (NVDA) and Etsy Inc (ETSY).
The top 10 holdings account for about 24.09% of total assets under management.
Performance and Risk
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.
The ETF has lost about -4.43% so far this year and is up about 19.39% in the last one year (as of 01/12/2022). In the past 52-week period, it has traded between $151.58 and $220.95.
The ETF has a beta of 1.09 and standard deviation of 25.68% for the trailing three-year period, making it a medium risk choice in the space. With about 76 holdings, it effectively diversifies company-specific risk.
Invesco S&P 500 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, RPG is a great option for investors seeking exposure to the Style Box - Large Cap Growth segment of the market. There are other additional ETFs in the space that investors could consider as well.
The Vanguard Growth ETF (VUG) and the Invesco QQQ (QQQ) track a similar index. While Vanguard Growth ETF has $86.36 billion in assets, Invesco QQQ has $209.02 billion. VUG has an expense ratio of 0.04% and QQQ charges 0.20%.
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 500 Pure Growth ETF (RPG): ETF Research Reports
NVIDIA Corporation (NVDA): Free Stock Analysis Report
Tesla, Inc. (TSLA): Free Stock Analysis Report
Invesco QQQ (QQQ): ETF Research Reports
Etsy, Inc. (ETSY): Free Stock Analysis Report
Vanguard Growth ETF (VUG): ETF Research Reports
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