雅虎香港財經 Should Invesco S&P SmallCap Momentum ETF (XSMO) Be on Your Investing Radar?
Designed to provide broad exposure to the Small Cap Growth segment of the US equity market, the Invesco S&P SmallCap Momentum ETF (XSMO) is a passively managed exchange traded fund launched on 03/03/2005.
The fund is sponsored by Invesco. It has amassed assets over $478.11 million, making it one of the average sized ETFs attempting to match the Small Cap Growth segment of the US equity market.
Why Small Cap Growth
There's a lot of potential to investing in small cap companies, but with market capitalization below $2 billion, that high potential comes with even higher risk.
Qualities of growth stocks include faster growth rates compared to the broader market, as well as higher valuations and higher than average sales and earnings growth rates. Something to keep in mind is the higher level of volatility that is affiliated with growth stocks. Compared to value stocks, growth stocks are a safer bet in a strong bull market, but don't perform as strongly in almost all other financial environments.
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 0.69%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Industrials sector--about 31.60% of the portfolio. Consumer Discretionary and Information Technology round out the top three.
Looking at individual holdings, Abercrombie & Fitch Co (ANF) accounts for about 3.12% of total assets, followed by Boise Cascade Co (BCC) and Installed Building Products Inc (IBP).
The top 10 holdings account for about 21.61% of total assets under management.
Performance and Risk
XSMO seeks to match the performance of the S&P SMALLCAP 600 MOMENTUM INDEX before fees and expenses. The S&P Smallcap 600 Momentum Index is composed of securities with strong growth characteristics selected from the Russell 2000 Index.
The ETF has added roughly 5.20% so far this year and was up about 27.02% in the last one year (as of 06/17/2024). In the past 52-week period, it has traded between $45.31 and $61.72.
The ETF has a beta of 1.06 and standard deviation of 22.59% for the trailing three-year period. With about 119 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco S&P SmallCap Momentum 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, XSMO is a reasonable option for those seeking exposure to the Style Box - Small Cap Growth area of the market. Investors might also want to consider some other ETF options in the space.
The iShares Russell 2000 Growth ETF (IWO) and the Vanguard Small-Cap Growth ETF (VBK) track a similar index. While iShares Russell 2000 Growth ETF has $10.82 billion in assets, Vanguard Small-Cap Growth ETF has $16.82 billion. IWO has an expense ratio of 0.24% and VBK charges 0.07%.
Bottom-Line
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are 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 S&P SmallCap Momentum ETF (XSMO): ETF Research Reports
Abercrombie & Fitch Company (ANF) : Free Stock Analysis Report
Boise Cascade, L.L.C. (BCC) : Free Stock Analysis Report
Installed Building Products, Inc. (IBP) : Free Stock Analysis Report
iShares Russell 2000 Growth ETF (IWO): ETF Research Reports
Vanguard Small-Cap Growth ETF (VBK): ETF Research Reports
