The Invesco Russell 2000 Dynamic Multifactor ETF (OMFS) was launched on 11/08/2017, and is a smart beta exchange traded fund designed to offer broad exposure to the Style Box - Small Cap Blend category of the market.
What Are Smart Beta ETFs?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
OMFS is managed by Invesco, and this fund has amassed over $266.89 million, which makes it one of the average sized ETFs in the Style Box - Small Cap Blend. OMFS seeks to match the performance of the RUSSELL 2000 INVESCO DYNAMIC MLTIFCTR ID before fees and expenses.
The Russell 2000 Invesco Dynamic Multifactor Index is constructed using a rules-based methodology by selecting equity securities from the Russell 2000 Index, which measures the performance of 2,000 small-capitalization companies in the United States.
Cost & Other Expenses
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
Operating expenses on an annual basis are 0.39% for this ETF, which makes it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 1.28%.
Sector Exposure and Top Holdings
Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.
Representing 29.8% of the portfolio, the fund has heaviest allocation to the Financials sector; Healthcare and Information Technology round out the top three.
When you look at individual holdings, Caretrust Reit Inc (CTRE) accounts for about 1.65% of the fund's total assets, followed by Firstcash Holdings Inc (FCFS) and Ssr Mining Inc (SSRM).
Its top 10 holdings account for approximately 12.01% of OMFS's total assets under management.
Performance and Risk
So far this year, OMFS return is roughly 13.47%, and it's up approximately 14.99% in the last one year (as of 10/05/2026). During this past 52-week period, the fund has traded between $40.76 and $53.99.
The fund has a beta of 0.99 and standard deviation of 19.78% for the trailing three-year period. With about 1112 holdings, it effectively diversifies company-specific risk .
Alternatives
Invesco Russell 2000 Dynamic Multifactor ETF is an excellent option for investors seeking to outperform the Style Box - Small Cap Blend segment of the market. There are other ETFs in the space which investors could consider as well.
iShares Russell 2000 ETF (IWM) tracks Russell 2000 Index and the iShares Core S&P Small-Cap ETF (IJR) tracks S&P SmallCap 600 Index. iShares Russell 2000 ETF has $79.09 billion in assets, iShares Core S&P Small-Cap ETF has $104.62 billion. IWM has an expense ratio of 0.19% and IJR changes 0.06%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - Small Cap Blend
Bottom Line
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Invesco Russell 2000 Dynamic Multifactor ETF (OMFS): ETF Research Reports
This article originally published on Zacks Investment Research (zacks.com).