Yahoo Finance Is Invesco Russell 2000 Dynamic Multifactor ETF (OMFS) a Strong ETF Right Now?
Designed to provide broad exposure to the Style Box - Small Cap Blend category of the market, the Invesco Russell 2000 Dynamic Multifactor ETF (OMFS) is a smart beta exchange traded fund launched on 11/08/2017.
What Are Smart Beta ETFs?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
The fund is sponsored by Invesco. It has amassed assets over $354.58 million, making it one of the average sized ETFs in the Style Box - Small Cap Blend. 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.
Cost & Other Expenses
For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.
Annual operating expenses for this ETF are 0.39%, making it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 1.52%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
For OMFS, it has heaviest allocation in the Industrials sector --about 22.10% of the portfolio --while Financials and Consumer Discretionary round out the top three.
Looking at individual holdings, Telephone And Data Systems Inc (TDS) accounts for about 0.75% of total assets, followed by Caleres Inc (CAL) and Hibbett Inc (HIBB).
OMFS's top 10 holdings account for about 6.04% of its total assets under management.
Performance and Risk
So far this year, OMFS has lost about -5.92%, and it's up approximately 9.15% in the last one year (as of 05/03/2024). During this past 52-week period, the fund has traded between $31.78 and $39.65.
The fund has a beta of 1.10 and standard deviation of 22.09% for the trailing three-year period. With about 701 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco Russell 2000 Dynamic Multifactor ETF is a reasonable option for investors seeking to outperform the Style Box - Small Cap Blend segment of the market. However, there are other ETFs in the space which investors could consider.
IShares Russell 2000 ETF (IWM) tracks Russell 2000 Index and the iShares Core S&P Small-Cap ETF (IJR) tracks S&P SmallCap 600 Index. IShares Russell 2000 ETF has $59.45 billion in assets, iShares Core S&P Small-Cap ETF has $77.14 billion. IWM has an expense ratio of 0.19% and IJR charges 0.06%.
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 - Small Cap Blend.
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 Russell 2000 Dynamic Multifactor ETF (OMFS): ETF Research Reports
Telephone and Data Systems, Inc. (TDS) : Free Stock Analysis Report
Hibbett, Inc. (HIBB) : Free Stock Analysis Report
iShares Russell 2000 ETF (IWM): ETF Research Reports
Caleres, Inc. (CAL) : Free Stock Analysis Report
iShares Core S&P Small-Cap ETF (IJR): ETF Research Reports
