Should Invesco S&P MidCap 400 Revenue ETF (RWK) Be on Your Investing Radar?

Core Viewpoint - The Invesco S&P MidCap 400 Revenue ETF (RWK) is designed to provide exposure to the Mid Cap Value segment of the US equity market, with a focus on companies that typically have higher growth prospects than large cap companies and are considered less risky than small cap counterparts [1][2]. Group 1: Fund Overview - RWK is a passively managed ETF launched on February 22, 2008, and has accumulated assets over $854.70 million, positioning it as an average-sized ETF in its category [1]. - The ETF has an annual operating expense ratio of 0.39%, which is competitive with most peer products, and a 12-month trailing dividend yield of 1.21% [4]. Group 2: Investment Characteristics - Mid cap companies, with market capitalizations between $2 billion and $10 billion, are seen as stable investments with growth potential [2]. - Value stocks, which RWK primarily invests in, have lower than average price-to-earnings and price-to-book ratios, and while they have historically outperformed growth stocks in most markets, they may underperform during strong bull markets [3]. Group 3: Sector Exposure and Holdings - The ETF has a significant allocation to the Industrials sector, comprising about 22.8% of the portfolio, followed by Consumer Discretionary and Financials [5]. - Albertsons Cos Inc (ACI) is the largest holding at approximately 3.05% of total assets, with the top 10 holdings accounting for about 18.77% of total assets under management [6]. Group 4: Performance Metrics - RWK aims to match the performance of the OFI Revenue Weighted Mid Cap Index, which re-weights constituents based on revenue, with a maximum weighting of 5% per company [7]. - The ETF has gained approximately 5.75% year-to-date and 7.61% over the past year, with a trading range between $94.80 and $126.49 in the last 52 weeks [8]. Group 5: Alternatives and Market Position - RWK carries a Zacks ETF Rank of 3 (Hold), indicating it is a viable option for investors seeking exposure to the Mid Cap Value segment [10]. - Alternatives include the iShares Russell Mid-Cap Value ETF (IWS) with $13.61 billion in assets and an expense ratio of 0.23%, and the Vanguard Mid-Cap Value ETF (VOE) with $18.34 billion in assets and a lower expense ratio of 0.07% [11]. Group 6: Industry Trends - Passively managed ETFs are gaining popularity among both institutional and retail investors due to their low cost, transparency, flexibility, and tax efficiency, making them suitable for long-term investment strategies [12].