Should Invesco Russell 2000 Dynamic Multifactor ETF (OMFS) Be on Your Investing Radar?
The Invesco Russell 2000 Dynamic Multifactor ETF (OMFS) was launched on 11/08/2017, and is a passively managed exchange traded fund designed to offer broad exposure to the Small Cap Blend segment of the US equity market.
The fund is sponsored by Invesco. It has amassed assets over $288.07 million, making it one of the average sized ETFs attempting to match the Small Cap Blend segment of the US equity market.
Why Small Cap Blend
Small cap companies have market capitalization below $2 billion. They usually have higher potential than large and mid cap companies with stocks but higher risk.
Blend ETFs are aptly named, since they tend to hold a mix of growth and value stocks, as well as show characteristics of both kinds of equities.
Costs
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
Annual operating expenses for this ETF are 0.39%, putting it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.56%.
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 Financials sector--about 25.70% of the portfolio. Industrials and Information Technology round out the top three.
Looking at individual holdings, Sprouts Farmers Market Inc (SFM) accounts for about 1.87% of total assets, followed by Fabrinet (FN) and Ensign Group Inc/the (ENSG).
The top 10 holdings account for about 11.5% of total assets under management.
Performance and Risk
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.
The ETF has lost about -4.55% so far this year and is down about -1.86% in the last one year (as of 08/09/2024). In the past 52-week period, it has traded between $31.78 and $39.65.
The ETF has a beta of 1.11 and standard deviation of 21.87% for the trailing three-year period. With about 683 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco Russell 2000 Dynamic Multifactor ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, OMFS is a sufficient option for those seeking exposure to the Style Box - Small Cap Blend area of the market. Investors might also want to consider some other ETF options in the space.
The iShares Russell 2000 ETF (IWM) and the iShares Core S&P Small-Cap ETF (IJR) track a similar index. While iShares Russell 2000 ETF has $65.29 billion in assets, iShares Core S&P Small-Cap ETF has $81.87 billion. IWM has an expense ratio of 0.19% and IJR charges 0.06%.
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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Get it free >>Invesco Russell 2000 Dynamic Multifactor ETF (OMFS): ETF Research Reports
Fabrinet (FN) : Free Stock Analysis Report
iShares Russell 2000 ETF (IWM): ETF Research Reports
Sprouts Farmers Market, Inc. (SFM) : Free Stock Analysis Report
The Ensign Group, Inc. (ENSG) : Free Stock Analysis Report
iShares Core S&P Small-Cap ETF (IJR): ETF Research Reports
