Should Invesco S&P MidCap Value with Momentum ETF (XMVM) Be on Your Investing Radar?
The Invesco S&P MidCap Value with Momentum ETF (XMVM) was launched on 03/03/2005, and is a passively managed exchange traded fund designed to offer broad exposure to the Mid Cap Value segment of the US equity market.
The fund is sponsored by Invesco. It has amassed assets over $219.64 million, making it one of the average sized ETFs attempting to match the Mid Cap Value segment of the US equity market.
Why Mid Cap Value
With market capitalization between $2 billion and $10 billion, mid cap companies usually contain higher growth prospects than large cap companies, and are considered less risky than their small cap counterparts. These types of companies, then, have a good balance of stability and growth potential.
Value stocks are known for their lower than average price-to-earnings and price-to-book ratios, but investors should also note their lower than average sales and earnings growth rates. When you look at long-term performance, value stocks have outperformed growth stocks in nearly all markets. But in strong bull markets, growth stocks are more likely to be winners.
Costs
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
Annual operating expenses for this ETF are 0.39%, putting it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.34%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Consumer Discretionary sector--about 21.70% of the portfolio. Financials and Energy round out the top three.
Looking at individual holdings, Avnet Inc (AVT) accounts for about 2.82% of total assets, followed by Pbf Energy Inc (PBF) and Td Synnex Corp (SNX).
The top 10 holdings account for about 23.15% of total assets under management.
Performance and Risk
XMVM seeks to match the performance of the S&P MIDCAP 400 HIGH MOMENTUM VALUE INDEX before fees and expenses. The S&P MidCap 400 High Momentum Value Index is composed of securities with strong value characteristics selected from the Russell Midcap Index.
The ETF has added roughly 3.02% so far this year and it's up approximately 12.80% in the last one year (as of 07/05/2024). In the past 52-week period, it has traded between $42.65 and $54.30.
The ETF has a beta of 1.18 and standard deviation of 22.21% for the trailing three-year period. With about 79 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco S&P MidCap Value with Momentum 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, XMVM is a reasonable option for those seeking exposure to the Style Box - Mid Cap Value area of the market. Investors might also want to consider some other ETF options in the space.
The iShares Russell Mid-Cap Value ETF (IWS) and the Vanguard Mid-Cap Value ETF (VOE) track a similar index. While iShares Russell Mid-Cap Value ETF has $12.52 billion in assets, Vanguard Mid-Cap Value ETF has $15.87 billion. IWS has an expense ratio of 0.23% and VOE charges 0.07%.
Bottom-Line
While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.
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 MidCap Value with Momentum ETF (XMVM): ETF Research Reports
Avnet, Inc. (AVT) : Free Stock Analysis Report
TD SYNNEX Corporation (SNX) : Free Stock Analysis Report
PBF Energy Inc. (PBF) : Free Stock Analysis Report
Vanguard Mid-Cap Value ETF (VOE): ETF Research Reports
iShares Russell Mid-Cap Value ETF (IWS): ETF Research Reports
