News

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?

The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.

Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.

But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.

These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.

Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.

Fund Sponsor & Index

The fund is managed by Invesco. PWV has been able to amass assets over $1.21 billion, 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

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 cousins, other things remaining the same.

Operating expenses on an annual basis are 0.55% for this ETF, which makes it one of the more expensive products in the space.

PWV's 12-month trailing dividend yield is 1.92%.

Sector Exposure and Top Holdings

ETFs offer 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.

PWV's heaviest allocation is in the Financials sector, which is about 28.70% of the portfolio. Its Energy and Healthcare round out the top three.

Taking into account individual holdings, Wells Fargo & Co (WFC) accounts for about 3.80% of the fund's total assets, followed by Bank Of America Corp (BAC) and Abbott Laboratories (ABT).

Its top 10 holdings account for approximately 34.18% of PWV's total assets under management.

Performance and Risk

Year-to-date, the Invesco Large Cap Value ETF has added about 20.41% so far, and is up about 27.74% over the last 12 months (as of 12/09/2024). PWV has traded between $49.06 and $61.73 in this past 52-week period.

The ETF has a beta of 0.86 and standard deviation of 14.49% 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 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 $66.62 billion in assets, Vanguard Value ETF has $133.06 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

Abbott Laboratories (ABT) : Free Stock Analysis Report

Vanguard Value ETF (VTV): ETF Research Reports

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

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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.