A smart beta exchange traded fund, the Invesco Russell 1000 Dynamic Multifactor ETF (OMFL) debuted on 11/08/2017, and offers broad exposure to the Style Box - Large Cap Growth 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.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
OMFL is managed by Invesco, and this fund has amassed over $4.8 billion, which makes it one of the larger ETFs in the Style Box - Large Cap Growth. This particular fund seeks to match the performance of the RUSSELL 1000 INVESCO DYNAMIC MLTIFCTR ID before fees and expenses.
The Russell 1000 Invesco Dynamic Multifactor Index is constructed using a rules-based methodology by selecting equity securities from the Russell 1000 Index, which measures the performance of the 1,000 largest-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.
Annual operating expenses for OMFL are 0.29%, which makes it one of the cheaper products in the space.
It has a 12-month trailing dividend yield of 0.82%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
For OMFL, it has heaviest allocation in the Information Technology sector --about 34.6% of the portfolio --while Healthcare and Industrials round out the top three.
Looking at individual holdings, Apple Inc (AAPL) accounts for about 9.03% of total assets, followed by Microsoft Corp (MSFT) and Nvidia Corp (NVDA).
Its top 10 holdings account for approximately 37.04% of OMFL's total assets under management.
Performance and Risk
Year-to-date, the Invesco Russell 1000 Dynamic Multifactor ETF has gained about 17.85% so far, and is up about 19.55% over the last 12 months (as of 10/22/2026). OMFL has traded between $57.28 $71.62 in this past 52-week period.
The ETF has a beta of 0.94 and standard deviation of 14.27% for the trailing three-year period. With about 635 holdings, it effectively diversifies company-specific risk .
Alternatives
Invesco Russell 1000 Dynamic Multifactor ETF is an excellent option for investors seeking to outperform the Style Box - Large Cap Growth segment of the market. There are other ETFs in the space which investors could consider as well.
Vanguard Morningstar Growth ETF (VUG) tracks CRSP U.S. Large Cap Growth Index and the Invesco QQQ (QQQ) tracks NASDAQ-100 Index. Vanguard Morningstar Growth ETF has $231.11 billion in assets, Invesco QQQ has $487.52 billion. VUG has an expense ratio of 0.03% and QQQ changes 0.18%.
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 - Large Cap Growth
Bottom Line
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Invesco Russell 1000 Dynamic Multifactor ETF (OMFL): ETF Research Reports
This article originally published on Zacks Investment Research (zacks.com).