Launched on 02/22/2008, the Invesco S&P 500 Revenue ETF (RWL) is a passively managed exchange traded fund designed to provide a broad exposure to the Large Cap Value segment of the US equity market.
The fund is sponsored by Invesco. It has amassed assets over $1.09 billion, making it one of the average sized ETFs attempting to match the Large Cap Value segment of the US equity market.
Why Large Cap Value
Companies that fall in the large cap category tend to 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.
While value stocks have lower than average price-to-earnings and price-to-book ratios, they also have 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 1.38%.
Sector Exposure and Top Holdings
ETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund’s holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Healthcare sector–about 18.60% of the portfolio. Consumer Discretionary and Financials round out the top three.
Looking at individual holdings, Walmart Inc (WMT) accounts for about 4.49% of total assets, followed by Amazon.com Inc (AMZN) and Apple Inc (AAPL).
The top 10 holdings account for about 23.64% of total assets under management.
Performance and Risk
RWL seeks to match the performance of the OFI Revenue Weighted Large Cap Index before fees and expenses. The OFI Revenue Weighted Large Cap Index is constructed by re-weighting the constituent securities of the S&P 500 Index according to the revenue earned by the companies in the S&P 500 Index.
The ETF has added roughly 26.54% so far this year and is up about 47.44% in the last one year (as of 11/02/2021). In the past 52-week period, it has traded between $55.48 and $77.27.
The ETF has a beta of 1.04 and standard deviation of 22.70% for the trailing three-year period, making it a medium risk choice in the space. With about 507 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco S&P 500 Revenue 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, RWL is a reasonable option for those seeking exposure to the Style Box – Large Cap Value area of the market. Investors might also want to consider some other ETF options in the space.
The iShares Russell 1000 Value ETF (IWD) and the Vanguard Value ETF (VTV) track a similar index. While iShares Russell 1000 Value ETF has $57.04 billion in assets, Vanguard Value ETF has $87.50 billion. IWD has an expense ratio of 0.19% and VTV charges 0.04%.
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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