Looking for broad exposure to the Small Cap Value segment of the US equity market? You should consider the Invesco S&P SmallCap 600 Pure Value ETF (RZV), a passively managed exchange traded fund launched on March 1, 2006.
The fund is sponsored by Invesco. It has amassed assets over $261.38 million, making it one of the average sized ETFs attempting to match the Small Cap Value segment of the US equity market.
Why Small Cap Value
With more potential comes more risk, and small cap companies, with market capitalization below $2 billion, epitomizes this way of thinking.
Carrying lower than average price-to-earnings and price-to-book ratios, value stocks also have lower than average sales and earnings growth rates. Looking at their long-term performance, value stocks have outperformed growth stocks in almost all markets. They are however likely to underperform growth stocks in strong bull markets.
Costs
Expense ratios are an important factor in the return of an ETF and in the long term, cheaper funds can significantly outperform their more expensive counterparts, other things remaining the same.
Annual operating expenses for this ETF are 0.35%, putting it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.38%.
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.
This ETF has heaviest allocation to the Consumer Discretionary sector -- about 26.1% of the portfolio. Industrials and Energy round out the top three.
Looking at individual holdings, Acadia Healthcare Co Inc (ACHC) accounts for about 1.92% of total assets, followed by Ichor Holdings Ltd (ICHR) and Patterson-Uti Energy Inc (PTEN).
The top 10 holdings account for about 13.81% of total assets under management.
Performance and Risk
RZV seeks to match the performance of the S&P SmallCap 600 Pure Value Index before fees and expenses. The S&P SmallCap 600 Pure Value Index measures the performance of securities that exhibit strong value characteristics in the S&P SmallCap 600 Index.
The ETF has gained about 14.7% so far this year and it's up approximately 41.12% in the last one year (as of 05/25/2026). In the past 52-week period, it has traded between $96.76 and $138.41.
The ETF has a beta of 1.11 and standard deviation of 23.2% for the trailing three-year period, making it a high risk choice in the space. With about 161 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco S&P SmallCap 600 Pure Value ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, RZV is an excellent option for investors seeking exposure to the Style Box - Small Cap Value segment of the market. There are other additional ETFs in the space that investors could consider as well.
The iShares Russell 2000 Value ETF (IWN) and the Vanguard Small-Cap Value Index Fund ETF Shares (VBR) track a similar index. While iShares Russell 2000 Value ETF has $13.73 billion in assets, Vanguard Small-Cap Value Index Fund ETF Shares has $34.99 billion. IWN has an expense ratio of 0.24% and VBR charges 0.05%.
Bottom-Line
While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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Invesco S&P SmallCap 600 Pure Value ETF (RZV): ETF Research Reports
This article originally published on Zacks Investment Research (zacks.com).