Ought to Invesco S&P MidCap 400 Income ETF (RWK) Be on Your Investing Radar?

When you’re thinking about broad publicity to the Mid Cap Worth section of the US fairness market, look no additional than the Invesco S&P MidCap 400 Income ETF (RWK), a passively managed alternate traded fund launched on 02/22/2008.

The fund is sponsored by Invesco. It has amassed property over $816.77 million, making it one of many common sized ETFs trying to match the Mid Cap Worth section of the US fairness market.

Why Mid Cap Worth

With market capitalization between $2 billion and $10 billion, mid cap firms normally include increased development prospects than massive cap firms, and are thought of much less dangerous than their small cap counterparts. Most of these firms, then, have a great stability of stability and development potential.

Carrying decrease than common price-to-earnings and price-to-book ratios, worth shares even have decrease than common gross sales and earnings development charges. While you have a look at long-term efficiency, worth shares have outperformed development shares in practically all markets. However in robust bull markets, development shares usually tend to be winners.

Prices

Since cheaper funds have a tendency to provide higher outcomes than dearer funds, assuming all different elements stay equal, it will be important for traders to concentrate to an ETF’s expense ratio.

Annual working bills for this ETF are 0.39%, making it one of many dearer merchandise within the house.

It has a 12-month trailing dividend yield of 1.23%.

Sector Publicity and High Holdings

Whereas ETFs supply diversified publicity, which minimizes single inventory danger, a deep look right into a fund’s holdings is a beneficial train. And, most ETFs are very clear merchandise that disclose their holdings each day.

This ETF has heaviest allocation to the Shopper Discretionary sector–about 20.90% of the portfolio. Industrials and Financials spherical out the highest three.

Taking a look at particular person holdings, Td Synnex Corp (SNX) accounts for about 3.02% of complete property, adopted by Efficiency Meals Group Co (PFGC) and American Airways Group Inc (AAL).

The highest 10 holdings account for about 17.29% of complete property beneath administration.

Efficiency and Threat

RWK seeks to match the efficiency of the OFI Income Weighted Mid Cap Index earlier than charges and bills. The S&P MidCap 400 Income-Weighted Index is constructed utilizing a rules-based methodology that re-weights the constituent securities of the S&P MidCap 400 Index in keeping with the income earned by the businesses within the father or mother index, topic to a most 5% per firm weighting.

The ETF has misplaced about -5.09% to date this yr and is down about -2.98% within the final one yr (as of 03/28/2025). Up to now 52-week interval, it has traded between $106.43 and $126.49.

The ETF has a beta of 1.26 and commonplace deviation of 20.72% for the trailing three-year interval, making it a medium danger selection within the house. With about 400 holdings, it successfully diversifies company-specific danger.

Alternate options

Invesco S&P MidCap 400 Income ETF carries a Zacks ETF Rank of three (Maintain), which is predicated on anticipated asset class return, expense ratio, and momentum, amongst different elements. Thus, RWK is an efficient choice for these in search of publicity to the Model Field – Mid Cap Worth space of the market. Buyers may also need to think about another ETF choices within the house.

The iShares Russell Mid-Cap Worth ETF (IWS) and the Vanguard Mid-Cap Worth ETF (VOE) observe the same index. Whereas iShares Russell Mid-Cap Worth ETF has $13.46 billion in property, Vanguard Mid-Cap Worth ETF has $17.43 billion. IWS has an expense ratio of 0.23% and VOE expenses 0.07%.

Backside-Line

An more and more common choice amongst retail and institutional traders, passively managed ETFs supply low prices, transparency, flexibility, and tax effectivity; they’re additionally glorious autos for long run traders.

To be taught extra about this product and different ETFs, display screen for merchandise that match your funding goals and browse articles on newest developments within the ETF investing universe, please go to Zacks ETF Center.