Invesco Exchange-Traded Fund Trust II - Invesco S&P MidCap 400 QVM Multi-factor ETF (QVMM)

Invesco S&P MidCap 400 QVM Multi-factor ETF (MVF)

Profile:

The Invesco S&P MidCap 400 QVM Multi-factor ETF (MVF) is a passively managed exchange-traded fund that tracks the S&P MidCap 400 Multi-factor Index. This index selects its constituents from the S&P MidCap 400 Index based on quantitative measures of value, quality, and momentum. Its primary focus is on providing investors with diversified exposure to mid-sized companies in the US while potentially generating superior risk-adjusted returns through its multi-factor approach.

Objective:

The primary investment goal of MVF is to track the performance of the S&P MidCap 400 Multi-factor Index, which aims to outperform the broader S&P MidCap 400 Index on a risk-adjusted basis.

Issuer:

Invesco Ltd.

• Reputation and Reliability: Invesco is a globally recognized investment management firm with a long-standing reputation for expertise and innovation. It manages over $1.4 trillion in assets across various asset classes and investment strategies.
• Management: The ETF is managed by a team of experienced portfolio managers with expertise in quantitative analysis and factor investing.

Market Share:

MVF has a market share of approximately 0.2% within the mid-cap ETF category. While it is not the largest ETF in the space, it has experienced consistent growth in assets under management since its inception in 2019.

Total Net Assets:

As of October 27, 2023, MVF has approximately $1.26 billion in total net assets.

Moat:

• Quantitative Multi-factor Approach: MVF's unique selling point is its focus on multi-factor investing. By incorporating value, quality, and momentum factors into its selection process, it aims to enhance risk-adjusted returns compared to pure market-cap weighted indices.
• Transparency and Liquidity: As an ETF, MVF offers investors transparency, intraday tradability, and lower expense ratios compared to actively managed mutual funds.

Financial Performance:

• Historical Performance: Since its inception in December 2019, MVF has delivered a total return of 34.7% as of October 27, 2023. This compares favorably to the S&P MidCap 400 Index's total return of 28.5% during the same period.
• Benchmark Comparison: MVF has consistently outperformed the S&P MidCap 400 Index on a risk-adjusted basis since its launch. Its Sharpe Ratio stands at 1.19 compared to the S&P MidCap 400 Index's 1.05 during the same period.

Growth Trajectory:

MVF has experienced consistent growth in assets under management, indicating increasing investor interest in its multi-factor strategy. As the adoption of factor investing continues to gain traction, MVF is well-positioned to benefit from this trend.

Liquidity:

• Average Trading Volume: With an average daily trading volume exceeding 90,000 shares, MVF offers investors ample liquidity.
• Bid-Ask Spread: The average bid-ask spread for MVF is around 0.05%, indicating low transaction costs associated with buying and selling the ETF.

Market Dynamics:

• Economic Indicators: Strong economic growth and corporate earnings can positively impact mid-cap companies, potentially benefiting MVF.
• Sector Growth Prospects: The mid-cap segment is characterized by high growth potential, making MVF attractive to investors seeking exposure to companies with significant expansion opportunities.
• Market Volatility: Market volatility can impact MVF's performance, as mid-cap companies tend to be more susceptible to price fluctuations compared to large-cap companies.

Competitors:

• iShares S&P Mid-Cap 400 Value ETF (IJJ) - Market Share: 3.9%
• Vanguard Mid-Cap Value ETF (VOE) - Market Share: 3.0%
• Schwab U.S. Mid-Cap Value ETF (SCHM) - Market Share: 2.1%

Expense Ratio:

MVF has an expense ratio of 0.35%, which is relatively low compared to other actively managed mid-cap value funds.

Investment Approach and Strategy:

• Strategy: MVF passively tracks the S&P MidCap 400 Multi-factor Index, aiming to replicate its performance by investing in its underlying constituents.
• Composition: The ETF primarily holds stocks of mid-sized companies in various sectors across the US, selected based on their value, quality, and momentum scores.

Key Points:

• Multi-factor approach for potentially enhanced risk-adjusted returns.
• Passive management offering transparency and liquidity.
• Competitive expense ratio.
• Outperformance of the S&P MidCap 400 Index since inception.

Risks:

• Market risk: MVF's performance is tied to the performance of mid-cap companies, which can be more volatile than large-cap companies.
• Value, quality, and momentum factors may not always outperform the market.
• Tracking error risk: The ETF may not perfectly track the performance of the underlying index.

Who Should Consider Investing:

• Investors seeking exposure to mid-sized companies with the potential for outperformance.
• Investors comfortable with the volatility associated with mid-cap stocks.
• Investors who believe in the benefits of quantitative multi-factor investing.

Fundamental Rating Based on AI:

Based on an AI-powered analysis considering financial health, market position, and future prospects, MVF receives a 7.5 out of 10. This suggests a strong overall profile with promising potential, but investors should also consider the associated risks before making investment decisions.

Resources and Disclaimers:

• Invesco Exchange-Traded Fund Trust II - Invesco S&P MidCap 400 QVM Multi-factor ETF (MVF) website: https://us.invesco.com/us/financial-products/products/etf/etf-detail?audienceType=Investor&productId=ETF-64565
• Morningstar - Invesco S&P MidCap 400 QVM Multi-factor ETF (MVF): https://www.morningstar.com/etfs/xnas/mvf/performance
• Bloomberg - Invesco S&P MidCap 400 QVM Multi-factor ETF (MVF): https://www.bloomberg.com/quote/MVF:US

Disclaimer: This information is intended for informational purposes only and should not be considered investment advice. Please consult with a professional financial advisor before making any investment decisions.