Invesco S&P SmallCap Value with Momentum ETF (XSVM – Free Report) was established on March 3, 2005 and is a passively managed exchange-traded fund designed to provide broad exposure to the small cap value segment of the US equity market.
This fund is sponsored by Invesco. He has amassed over $684.73 million in assets, making him one of his ETFs of average size comparable to the small cap value segment of the US stock market.
Why Small Cap Value
The higher the probability, the higher the risk. Small-cap companies with a market capitalization of less than $2 billion epitomize this thinking.
Value stocks have lower-than-average price-earnings to price-to-book ratios, but also lower-than-average sales and earnings growth. When considering long-term performance, value stocks outperform growth stocks in almost every market, and growth stocks are more likely to outperform value stocks in a bull market.
cost
Expense ratio is an important factor when considering the total return of ETFs, and if all other factors remain the same, cheaper funds can significantly outperform expensive ones over the long term.
The ETF has an annual operating cost of 0.36%, comparable to most similar products in the space.
The 12-month trailing dividend yield is 1.79%.
Sector exposure and top holdings
ETFs offer diversified exposure, thus minimizing single-stock risk, but it is still important to delve into fund holdings before investing. Most ETFs are highly transparent products. and many disclose their holdings daily.
This ETF has the largest allocation to the financial sector, accounting for approximately 29.60% of the portfolio. Consumer Discretionary and Industrial Products round out the top three.
Looking at individual holdings, Conn’s Inc (connection – Free Report) accounted for approximately 1.96% of total assets and Atlas Air Worldwide Holdings Inc (AAWW – Free Report) and Cross Country Healthcare Inc (CCRN – free report).
The top 10 stocks account for approximately 15.22% of total assets under management.
performance and risk
XSVM aims to match the performance of the S&P 600 HIGH MOMENTUM VALUE INDEX before fees and expenses. The S&P 600 High Momentum Value Index comprises securities with strong value characteristics selected from the Russell 2000 Index.
The ETF is down about -14.91% so far this year and is down about -13.36% over the past year (as of 01/02/2023). Over the past 52 weeks, it has traded between $41.20 and $55.63.
The ETF has a beta of 1.23 and a 35.52% standard deviation over the last three years. It holds approximately 121 shares and effectively diversifies company-specific risks.
Alternative proposal
The Invesco S&P SmallCap Value with Momentum ETF has a Zacks ETF Rank of 3 (Hold), which is based on factors such as the asset class’ expected return, expense ratio, and momentum. XSVM is therefore a reasonable option for those seeking exposure to the style box – small cap value area of the market. Investors may also want to consider his other ETF options in this space.
iShares Russell 2000 Value ETF (IWN – Free Report) and Vanguard SmallCap Value ETF (VBR – Free Report) tracks similar indexes. The iShares Russell 2000 Value ETF has $11.93 billion in assets, while the Vanguard SmallCap Value ETF has $23.68 billion in assets. The IWN expense ratio is 0.23% and the VBR fee is 0.07%.
bottom line
Passively managed ETFs are gaining popularity among institutional and individual investors due to their low cost, transparency, flexibility and tax benefits. They are excellent vehicles for long-term investors.
Visit the Zacks ETF Center to learn more about this and other ETFs, select products that meet your investment objectives, and read articles about the latest developments in the ETF investment universe.
