If you're interested in broad exposure to the Large Cap Value segment of the US equity market, look no further than the Invesco S&P 500 Revenue ETF (RWL), a passively managed exchange traded fund launched on 02/22/2008.

The fund is sponsored by Invesco. It has amassed assets over $1.67 billion, 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. Overall, they are usually a stable option, with less risk and more sure-fire cash flows than mid and small cap companies.

Value stocks have lower than average price-to-earnings and price-to-book ratios. They also have lower than average sales and earnings growth rates. While value stocks have outperformed growth stocks in nearly all markets when you consider long-term performance, growth stocks are more likely to outpace value stocks in strong bull markets.

Costs

When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.

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 1.70%.

Sector Exposure and Top Holdings

Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.

This ETF has heaviest allocation to the Healthcare sector--about 16.90% of the portfolio. Consumer Discretionary and Information Technology round out the top three.

Looking at individual holdings, Walmart Inc (WMT) accounts for about 3.88% of total assets, followed by Amazon.com Inc (AMZN) and Exxon Mobil Corp (XOM).

The top 10 holdings account for about 21.3% of total assets under management.

Performance and Risk

RWL seeks to match the performance of the OFI Revenue Weighted Large Cap Index before fees and expenses. The S&P 500 Revenue-Weighted Index is constructed by using a rules-based methodology that re-weights the constituent securities of the S&P 500 Index according to the revenue earned by the companies in the parent index- subject to a maximum 5% per company weighting.

The ETF has gained about 0.89% so far this year and is down about -5.16% in the last one year (as of 03/22/2023). In the past 52-week period, it has traded between $67.11 and $82.04.

The ETF has a beta of 0.99 and standard deviation of 20.29% for the trailing three-year period, making it a medium risk choice in the space. With about 504 holdings, it effectively diversifies company-specific risk.

Alternatives

Invesco S&P 500 Revenue 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, RWL is a sufficient 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 iShares Russell 1000 Value ETF (IWD) and the Vanguard Value ETF (VTV) track a similar index. While iShares Russell 1000 Value ETF has $50.14 billion in assets, Vanguard Value ETF has $99.68 billion. IWD has an expense ratio of 0.18% 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 S&P 500 Revenue ETF (RWL): ETF Research Reports

Amazon.com, Inc. (AMZN) : Free Stock Analysis Report

Exxon Mobil Corporation (XOM) : Free Stock Analysis Report

Walmart Inc. (WMT) : Free Stock Analysis Report

Vanguard Value ETF (VTV): ETF Research Reports

iShares Russell 1000 Value ETF (IWD): ETF Research Reports

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