Invesco’s Dynamic ETF Targets Large Cap Growth

The Invesco Russell 1000 Dynamic Multifactor ETF (OMFL), launched on November 8, 2017, offers investors broad exposure to the Large Cap Growth segment of the US equity market. Managed by Invesco, this ETF has attracted over $5.22 billion in assets, positioning it among the larger funds in this sector.

Understanding Large Cap Growth Stocks

Large cap companies are those typically valued above $10 billion. They are often more stable and less volatile compared to smaller companies, offering predictable cash flows. Growth stocks, a subset of this category, tend to show rapid growth compared to the overall market. While they can offer higher valuations, they also come with increased risk. Historically, growth stocks have performed well during market upswings, but value stocks have generally outperformed them over time.

Cost Factors

When assessing an ETF, the expense ratio plays a crucial role in total returns. Funds with lower costs can provide better long-term performance if all other factors are equal. OMFL has an annual operating expense of 0.29%, which is competitive within the industry. Currently, the ETF offers a 12-month trailing dividend yield of 1.33%.

Sector Focus and Major Holdings

Investors need to examine an ETF’s holdings for informed decisions, despite the diversified risks they entail. Transparency is a key aspect; most ETFs disclose their holdings daily. OMFL primarily invests in the Information Technology sector, which comprises roughly 26.30% of its portfolio. Financials and Industrials follow as the next largest sectors.

In terms of individual stocks, Meta Platforms Inc (META) makes up about 5.32% of total assets, with Berkshire Hathaway Inc (BRK/B) and Costco Wholesale Corp (COST) also featured prominently. Together, the top 10 holdings account for about 42.33% of the total assets under management.

Performance and Risk Assessment

The OMFL aims to replicate the RUSSELL 1000 INVESCO DYNAMIC MULTIFACTOR INDEX’s performance before fees and expenses. This index is built using a rule-based methodology, selecting stocks from the Russell 1000 Index, which represents the 1,000 largest-cap companies in the U.S.

This year, the ETF has delivered a return of approximately 4.04%, while it increased by about 21.17% over the past year (as of November 4, 2024). During the last 52 weeks, its trading range was between $45.18 and $55.23.

With a beta of 1.01 and a standard deviation of 17.34% over the trailing three years, OMFL effectively mitigates company-specific risk across its 251 holdings.

Alternative ETF Options

The Invesco Russell 1000 Dynamic Multifactor ETF currently holds a Zacks ETF Rank of 2 (Buy), indicating its value as an investment choice within the Large Cap Growth segment. Other ETFs worth considering include the Vanguard Growth ETF (VUG) and Invesco QQQ (QQQ). VUG has assets totaling $141.16 billion, while QQQ’s assets amount to $295.68 billion. Additionally, VUG boasts an expense ratio of 0.04%, whereas QQQ charges 0.20%.

Final Thoughts

Increasingly popular with both retail and institutional investors, passively managed ETFs stand out for their low costs, transparency, and tax efficiency. They are particularly well-suited for long-term investment strategies.

For more insights into this ETF and others, consider exploring products that align with your investment goals. Stay updated on the latest developments in ETF investing by visiting Zacks ETF Center.

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Invesco Russell 1000 Dynamic Multifactor ETF (OMFL): ETF Research Reports

Costco Wholesale Corporation (COST): Free Stock Analysis Report

Invesco QQQ (QQQ): ETF Research Reports

Vanguard Growth ETF (VUG): ETF Research Reports

Meta Platforms, Inc. (META): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.