Is Invesco Large Cap Value ETF (PWV) a Strong ETF Right Now?

Designed to provide broad exposure to the Style Box - Large Cap Value category of the market, the Invesco Large Cap Value ETF (PWV) is a smart beta exchange traded fund launched on 03/03/2005.

What Are Smart Beta ETFs?

Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.

Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.

There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.

Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.

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

Managed by Invesco, PWV has amassed assets over $884.63 million, making it one of the average sized ETFs in the Style Box - Large Cap Value. This particular fund, before fees and expenses, seeks to match the performance of the Dynamic Large Cap Value Intellidex Index.

The Dynamic Large Cap Value Intellidex Index is designed to provide capital appreciation while maintaining consistent stylistically accurate exposure.

Cost & Other Expenses

Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.

With one of the more expensive products in the space, this ETF has annual operating expenses of 0.55%.

It's 12-month trailing dividend yield comes in at 1.94%.

Sector Exposure and Top Holdings

While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.

This ETF has heaviest allocation in the Energy sector - about 19.90% of the portfolio. Financials and Healthcare round out the top three.

Taking into account individual holdings, Wells Fargo & Co (WFC) accounts for about 3.64% of the fund's total assets, followed by Home Depot Inc/the (HD) and Bank Of America Corp (BAC).

Its top 10 holdings account for approximately 33.86% of PWV's total assets under management.

Performance and Risk

The ETF has added about 12.42% and was up about 26.77% so far this year and in the past one year (as of 04/04/2024), respectively. PWV has traded between $43.67 and $56.78 during this last 52-week period.

The fund has a beta of 0.87 and standard deviation of 14.60% for the trailing three-year period, which makes PWV a medium risk choice in this particular space. With about 52 holdings, it effectively diversifies company-specific risk.

Alternatives

Invesco Large Cap Value ETF is a reasonable option for investors seeking to outperform the Style Box - Large Cap Value segment of the market. However, there are other ETFs in the space which investors could consider.

Schwab U.S. Dividend Equity ETF (SCHD) tracks Dow Jones U.S. Dividend 100 Index and the Vanguard Value ETF (VTV) tracks CRSP U.S. Large Cap Value Index. Schwab U.S. Dividend Equity ETF has $55.67 billion in assets, Vanguard Value ETF has $114.65 billion. SCHD has an expense ratio of 0.06% and VTV charges 0.04%.

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 Value.

Bottom Line

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 Large Cap Value ETF (PWV): ETF Research Reports

Bank of America Corporation (BAC) : Free Stock Analysis Report

Wells Fargo & Company (WFC) : Free Stock Analysis Report

The Home Depot, Inc. (HD) : Free Stock Analysis Report

Vanguard Value ETF (VTV): ETF Research Reports

Schwab U.S. Dividend Equity ETF (SCHD): ETF Research Reports

To read this article on Zacks.com click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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