Yahoo Finance Should Invesco Russell 2000 Dynamic Multifactor ETF (OMFS) Be on Your Investing Radar?
Launched on 11/08/2017, the Invesco Russell 2000 Dynamic Multifactor ETF (OMFS) is a passively managed exchange traded fund designed to provide a broad exposure to the Small Cap Blend segment of the US equity market.
The fund is sponsored by Invesco. It has amassed assets over $286.41 million, making it one of the average sized ETFs attempting to match the Small Cap Blend segment of the US equity market.
Why Small Cap Blend
Sitting at a market capitalization below $2 billion, small cap companies tend to be high-potential stocks compared to its large and mid cap counterparts, but come with higher risk.
Typically holding a combination of both growth and value stocks, blend ETFs also demonstrate qualities seen in value and growth investments.
Costs
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
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 1.87%.
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.
This ETF has heaviest allocation to the Industrials sector--about 22.50% of the portfolio. Financials and Information Technology round out the top three.
Looking at individual holdings, Emcor Group Inc (EME) accounts for about 1.59% of total assets, followed by Kinsale Capital Group Inc (KNSL) and Murphy Usa Inc (MUSA).
The top 10 holdings account for about 11.56% of total assets under management.
Performance and Risk
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.
The ETF has added roughly 0.58% so far this year and is down about -0.60% in the last one year (as of 05/22/2023). In the past 52-week period, it has traded between $31.60 and $38.79.
The ETF has a beta of 1.10 and standard deviation of 26.69% for the trailing three-year period. With about 709 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco Russell 2000 Dynamic Multifactor 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, OMFS is a good option for those seeking exposure to the Style Box - Small Cap Blend area of the market. Investors might also want to consider some other ETF options in the space.
The iShares Russell 2000 ETF (IWM) and the iShares Core S&P Small-Cap ETF (IJR) track a similar index. While iShares Russell 2000 ETF has $48.39 billion in assets, iShares Core S&P Small-Cap ETF has $64.16 billion. IWM has an expense ratio of 0.19% and IJR charges 0.06%.
Bottom-Line
An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also excellent vehicles for long term investors.
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
EMCOR Group, Inc. (EME) : Free Stock Analysis Report
Murphy USA Inc. (MUSA) : Free Stock Analysis Report
iShares Russell 2000 ETF (IWM): ETF Research Reports
iShares Core S&P Small-Cap ETF (IJR): ETF Research Reports
Kinsale Capital Group, Inc. (KNSL) : Free Stock Analysis Report
