Should Invesco Large Cap Value ETF (PWV) Be on Your Investing Radar?
Designed to provide broad exposure to the Large Cap Value segment of the US equity market, the Invesco Large Cap Value ETF (PWV) is a passively managed exchange traded fund launched on 03/03/2005.
The fund is sponsored by Invesco. It has amassed assets over $882.58 million, making it one of the average sized ETFs attempting to match the Large Cap Value segment of the US equity market.
Why Large Cap Value
Companies that fall in the large cap category tend to have a market capitalization above $10 billion. They tend to be stable companies with predictable cash flows and are usually less volatile than mid and small cap companies.
Value stocks are known for their lower than average price-to-earnings and price-to-book ratios, but investors should also note their lower than average sales and earnings growth rates. Considering long-term performance, value stocks have outperformed growth stocks in almost all markets; however, they are more 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 0.55%, making it one of the more expensive products in the space.
It has a 12-month trailing dividend yield of 2%.
Sector Exposure and Top Holdings
ETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Energy sector--about 20.30% of the portfolio. Financials and Healthcare round out the top three.
Looking at individual holdings, Conocophillips (COP) accounts for about 3.65% of total assets, followed by Exxon Mobil Corp (XOM) and Wells Fargo & Co (WFC).
The top 10 holdings account for about 33.35% of total assets under management.
Performance and Risk
PWV seeks to match the performance of the Dynamic Large Cap Value Intellidex Index before fees and expenses. The Dynamic Large Cap Value Intellidex Index is designed to provide capital appreciation while maintaining consistent stylistically accurate exposure.
The ETF has gained about 9.37% so far this year and is up roughly 23.48% in the last one year (as of 04/26/2024). In the past 52-week period, it has traded between $43.67 and $56.78.
The ETF has a beta of 0.87 and standard deviation of 14.62% for the trailing three-year period, making it a medium risk choice in the space. With about 52 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco Large Cap Value 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, PWV is a good option for those seeking exposure to the Style Box - Large Cap Value area of the market. Investors might also want to consider some other ETF options in the space.
The Schwab U.S. Dividend Equity ETF (SCHD) and the Vanguard Value ETF (VTV) track a similar index. While Schwab U.S. Dividend Equity ETF has $54.25 billion in assets, Vanguard Value ETF has $112.68 billion. SCHD has an expense ratio of 0.06% and VTV charges 0.04%.
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 Large Cap Value ETF (PWV): ETF Research Reports
Wells Fargo & Company (WFC) : Free Stock Analysis Report
Exxon Mobil Corporation (XOM) : Free Stock Analysis Report
ConocoPhillips (COP) : Free Stock Analysis Report
Vanguard Value ETF (VTV): ETF Research Reports
Schwab U.S. Dividend Equity ETF (SCHD): ETF Research Reports
