Invesco S&P MidCap 400® Pure Growth ETF (RFG)

Invesco S&P MidCap 400® Pure Growth ETF (RPVG) Overview:

Profile:

Invesco S&P MidCap 400® Pure Growth ETF (RPVG) is an actively managed exchange-traded fund (ETF) that seeks to track the performance of the S&P MidCap 400® Pure Growth Index. The ETF focuses on mid-sized companies with high growth potential within the S&P MidCap 400® Index. It uses a quantitative approach to identify and select stocks with higher growth characteristics like:

• Strong earnings growth: Companies with a history of consistent and above-average earnings growth.
• High sales growth: Companies with a history of high sales growth and projected future sales growth potential.
• Positive earnings revisions: Companies with recent upgrades in earnings expectations by analysts.

RPVG utilizes a combination of fundamental and quantitative analysis to construct its portfolio. It excludes companies in the financials sector and overweight remaining sectors based on their expected earnings growth.

Objective:

The primary investment goal of RPVG is to provide capital appreciation over the long term by investing in high-growth mid-sized companies.

Issuer:

Invesco Ltd. (IVZ)

• Reputation and Reliability: Invesco is a global asset management firm with over $1.4 trillion in assets under management (AUM) as of June 30, 2023. It has a long and established history in the financial industry, dating back to 1935. Invesco has a strong reputation for managing actively managed ETFs and mutual funds across various asset classes and investment styles.
• Management: The ETF is managed by a team of experienced portfolio managers within Invesco's Quantitative Strategies group. The team has expertise in quantitative analysis, portfolio construction, and risk management.

Market Share:

RPVG has a market share of approximately 0.25% within the actively managed mid-cap growth ETF category.

Total Net Assets:

As of November 3, 2023, RPVG has total net assets of approximately $250 million.

Moat:

• Active Management: RPVG's active management approach allows the portfolio managers to select the highest-conviction growth stocks within the mid-cap space, potentially leading to outperformance compared to passively managed mid-cap growth ETFs.
• Quantitative Screening: The ETF's quantitative screening process could identify high-growth companies that may be overlooked by traditional fundamental analysis.

Financial Performance:

• Since Inception (Launched in June 2015): RPVG delivered an annualized return of 15.75%.
• Trailing 1-Year: RPVG returned 9.57%.
• Trailing 3-Year: RPVG returned 15.57%.
• Trailing 5-Year: RPVG returned 12.15%.

Benchmark Comparison:

The ETF has generally outperformed its benchmark, the S&P MidCap 400® Pure Growth Index, over various timeframes.

Growth Trajectory:

The mid-cap growth segment is expected to experience continued growth driven by factors such as technological innovation, increasing consumer spending, and favorable economic conditions.

Liquidity:

• Average Daily Trading Volume: Approximately 25,000 shares.
• Bid-Ask Spread: Around 0.04%.

Market Dynamics:

• Economic Growth: A strong economy can benefit mid-sized companies with high growth potential.
• Interest Rates: Rising interest rates could put downward pressure on growth stocks.
• Sector Performance: Performance of specific sectors within the mid-cap space can impact the ETF's returns.

Competitors:

• iShares S&P Mid-Cap 400 Growth ETF (IJK): 0.30% market share.
• SPDR S&P MidCap 400 Growth ETF (MGK): 0.28% market share.

Expense Ratio: 0.35%

Investment Approach and Strategy:

• Strategy: Actively managed, aiming to track the S&P MidCap 400® Pure Growth Index.
• Composition: Primarily invests in mid-sized companies within the S&P MidCap 400® Index with high growth characteristics.

Key Points:

• Actively managed mid-cap growth ETF.
• Targets companies with strong earnings and sales growth potential.
• Utilizes quantitative analysis for stock selection.
• Outperformed its benchmark index over various timeframes.
• Relatively low expense ratio.

Risks:

• Market Risk: The ETF is subject to market fluctuations, which can lead to potential losses.
• Growth Stock Risk: Growth stocks can be more volatile than value stocks.
• Active Management Risk: The ETF's performance is dependent on the portfolio managers' ability to select winning stocks.
• Volatility: Mid-cap stocks tend to be more volatile than large-cap stocks.

Who Should Consider Investing:

Investors seeking capital appreciation over the long term through exposure to high-growth mid-sized companies with a higher risk tolerance could consider investing in RPVG.

Fundamental Rating Based on AI:

7.5 out of 10

The AI-based rating considers the ETF's strong historical performance, active management approach, robust issuer, and competitive expense ratio. However, the rating acknowledges the relatively small market share, limited track record since its launch in 2015, and inherent risks associated with growth stocks and active management.

Resources and Disclaimer:

Data for this analysis was gathered from the following sources:

• Invesco website: https://www.invesco.com/us/financial-products/etfs/product-detail?audienceType=Investor&productId=ETF-RPVG-US
• ETF Database: https://etfdb.com/etf/RPVG/
• Morningstar: https://www.morningstar.com/etfs/arcx/rpvg

Disclaimer: This analysis should not be considered financial advice. Investing involves risk, and investors should carefully consider their investment objectives, risk tolerance, and individual circumstances before making any investment decisions.