Making its debut on 03/01/2006, smart beta exchange traded fund Invesco S&P MidCap 400 Pure Value ETF (RFV) provides investors broad exposure to the Style Box - Mid Cap Value category of the market.
What Are Smart Beta ETFs?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.
A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.
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.
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
Managed by Invesco, RFV has amassed assets over $305.1 million, making it one of the average sized ETFs in the Style Box - Mid Cap Value. This particular fund, before fees and expenses, seeks to match the performance of the S&P MidCap 400 Pure Value Index.
The S&P MidCap 400 Pure Value Index measures the performance of securities that exhibit strong value characteristics in the S&P MidCap 400 Index.
Cost & Other Expenses
For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.
With on par with most peer products in the space, this ETF has annual operating expenses of 0.35%.
RFV's 12-month trailing dividend yield is 0.94%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Consumer Discretionary sector - about 21% of the portfolio. Financials and Industrials round out the top three.
Taking into account individual holdings, Avnet Inc (AVT) accounts for about 2.99% of the fund's total assets, followed by Pbf Energy Inc (PBF) and Arrow Electronics Inc (ARW).
RFV's top 10 holdings account for about 22.98% of its total assets under management.
Performance and Risk
The ETF has added roughly 6.82% and it's up approximately 32.13% so far this year and in the past one year (as of 04/14/2026), respectively. RFV has traded between $103.11 and $142.77 during this last 52-week period.
RFV has a beta of 1.09 and standard deviation of 20.80% for the trailing three-year period, which makes the fund a high risk choice in the space. With about 102 holdings, it effectively diversifies company-specific risk .
Alternatives
Invesco S&P MidCap 400 Pure Value ETF is a reasonable option for investors seeking to outperform the Style Box - Mid Cap Value segment of the market. However, there are other ETFs in the space which investors could consider.
iShares Russell Mid-Cap Value ETF (IWS) tracks Russell MidCap Value Index and the Vanguard Mid-Cap Value Index Fund ETF Shares (VOE) tracks CRSP U.S. Mid Cap Value Index. iShares Russell Mid-Cap Value ETF has $14.67 billion in assets, Vanguard Mid-Cap Value Index Fund ETF Shares has $21.83 billion. IWS has an expense ratio of 0.23% and VOE changes 0.05%.
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 - Mid Cap Value
Bottom Line
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Invesco S&P MidCap 400 Pure Value ETF (RFV): ETF Research Reports
This article originally published on Zacks Investment Research (zacks.com).