Should Invesco S&P MidCap Value with Momentum ETF (XMVM) be on your investment radar?

The Invesco S&P MidCap Value with Momentum ETF (XMVM) was launched on March 3, 2005 and is a passively managed exchange-traded fund that offers broad coverage of the mid-cap value segment of the US stock market.

The fund is sponsored by Invesco and has accumulated over $219.64 million in assets, making it one of the mid-cap ETFs that seek to target the mid-cap value segment of the U.S. stock market.

Why Mid Cap Value

With a market capitalization between $2 billion and $10 billion, mid-cap companies typically have higher growth prospects than large-cap companies and are considered less risky than their small-cap counterparts. This type of company therefore has a good balance between stability and growth potential.

Value stocks are known for their below-average price-to-earnings and price-to-book ratios, but investors should also pay attention to their below-average revenue and earnings growth rates. Looking at long-term performance, value stocks have outperformed growth stocks in almost all markets. However, in strong bull markets, growth stocks tend to be the winners.

Cost

Since cheaper funds tend to achieve better results than more expensive funds, all other factors being equal, it is important for investors to pay attention to the expense ratio of an ETF.

The annual operating expenses for this ETF are 0.39%, which is comparable to most comparable products in this space.

The dividend yield for the last 12 months is 1.34%.

Sector engagement and top holdings

It’s important to research an ETF’s holdings before investing, although this type of fund offers many benefits, such as a diversified investment that minimizes the risk of individual stocks. Additionally, most ETFs are very transparent products that disclose their holdings on a daily basis.

This ETF has the largest share in the consumer discretionary sector – about 21.70% of the portfolio. Financials and energy round out the top three.

Looking at the 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 approximately 23.15% of total assets under management.

Performance and risk

XMVM seeks to provide performance before fees and expenses consistent with the S&P MIDCAP 400 HIGH MOMENTUM VALUE INDEX. The S&P MidCap 400 High Momentum Value Index consists of securities with strong value characteristics selected from the Russell Midcap Index.

The ETF has gained around 3.02% so far this year and is up around 12.80% over the past year (as of July 5, 2024). Over the past 52-week period, it traded between $42.65 and $54.30.

The ETF has a beta of 1.18 and a standard deviation of 22.21% for the last three-year period. With about 79 holdings, it effectively diversifies company-specific risk.

Alternatives

The Invesco S&P MidCap Value with Momentum ETF has a Zacks ETF Rank of 3 (Hold) based on expected asset class return, expense ratio and momentum, among other factors. Therefore, XMVM is a reasonable option for those looking to gain exposure to the Style Box – Mid Cap Value area of ​​the market. Investors should also consider some other ETF options in this space.

The iShares Russell Mid-Cap Value ETF (IWS) and the Vanguard Mid-Cap Value ETF (VOE) track a similar index. While the iShares Russell Mid-Cap Value ETF has $12.52 billion in assets, the Vanguard Mid-Cap Value ETF has $15.87 billion. The IWS has an expense ratio of 0.23% and the VOE charges 0.07%.

Bottom line

Passively managed ETFs are not only an excellent tool for long-term investors, but are also a popular choice among institutional and private investors due to their low costs, transparency, flexibility and tax efficiency.

To learn more about this product and other ETFs, search for products that fit your investment objectives, and read articles about the latest developments in the ETF investment universe, please visit the 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

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