Invesco expands its SMID cap factor ETFs to offer investors
access to the differentiated return profile of small-cap and
mid-cap factors
ATLANTA, April 4,
2024 /PRNewswire/ -- Invesco Ltd. (NYSE: IVZ), a
leading global asset management firm, announced today that it has
expanded its line-up of small-and-mid-cap (SMID) factor exchange
traded funds (ETFs). In the first quarter of 2024 there has been an
uptick of interest into notable Invesco SMID Factor ETFs as
investors search for fund profiles differentiated from the
large-cap growth profiles currently dominating markets.
For this reason, Invesco will now offer its "Growth at a
Reasonable Price" strategy, captured in the large-cap Invesco
S&P 500 GARP ETF (SPGP), in both a mid-cap Invesco S&P
MidCap 400 GARP ETF (GRPM) and small-cap Invesco S&P Small Cap
600 ETF (GRPZ), applying the same methodology further down the
market-cap spectrum.
"While there is often a place in a portfolio for a core
large-cap growth strategy like Invesco QQQ, those investors looking
for growth in the SMID space should consider ETFs with a factor
screen," says Nick Kalivas, Head of
Factor and Core Equity ETF Strategy at Invesco. "The combination of
less expensive valuation down the market-cap spectrum and a
forecasted improvement in 2024 profit growth invites investors to
look to SMID factor strategies for potential investment
opportunities."
Factor investing has always been an important bridge between
passive market-cap weighted portfolios and actively managed
portfolios. This is especially apparent in the SMID cap-tiers,
where factor screening can provide a portfolio of unique companies
that offer diversification beyond the mega-cap growth names. SMID
factors can also be good portfolio building blocks, using factors
to screen for small- and mid-cap companies that may tend to have
higher growth prospects and less volatility than their market-cap
screened counterparts. This can offer a nice balance of growth
potential and stability.
In 2024, investors have recognized the opportunity with Invesco
S&P Midcap Quality ETF (XMHQ), and Invesco S&P SmallCap
Quality ETF (XSHQ) seeing high levels of investor demand,
gathering $1.15 billion in inflows in
1Q year-to-date. These ETFs provide exposure to companies
with high return on equity, low balance accruals, and low debt to
equity at a value. Additionally, XMHQ and XSHQ do not have the same
concentration issue that has been a headwind in large-cap
factors.
The SMID momentum factor has also seen interest as both the
Invesco S&P MidCap Momentum ETF (XMMO) and Invesco S&P
SmallCap Momentum ETF (XSMO) offer differentiated growth
returns by concentrating on stocks with the strongest risk adjusted
performance over the last year, less the last month.
"In the past, investors may have expressed concern about some of
the hallmarks of small- or mid-cap companies, such as a higher
level of leverage and lower level of profitability," says Kalivas.
"A factor screen for quality can mitigate those concerns and focus
the ETF on companies that are utilizing capital in an efficient
manner and generating higher cash in earnings.
About Invesco Ltd.
Invesco Ltd. (Ticker NYSE: IVZ) is
a global independent investment management firm dedicated to
delivering an investment experience that helps people get more out
of life. Our distinctive investment teams deliver a comprehensive
range of active, passive and alternative investment capabilities.
With offices in more than 20 countries, Invesco managed
US$1.58 trillion in assets on behalf
of clients worldwide as of December 31,
2023. For more information, visit
www.invesco.com/corporate
Important Information:
Invesco Distributors, Inc. is not affiliated with S&P Dow
Jones Indexes.
Invesco S&P GARP ETF (SPGP) tracks the S&P 500® GARP
Index seeks to track companies with consistent fundamental growth,
reasonable valuation, solid financial strength, and strong earning
power.
Invesco S&P MidCap 400 GARP ETF (GRPM) tracks the S&P
MidCap 400® GARP Index seeks to track companies with consistent
fundamental growth, reasonable valuation, solid financial strength
and strong earning power.
Invesco S&P Small Cap 600 (GRPZ) tracks the S&P SmallCap
600® GARP Index seeks to track companies with consistent
fundamental growth, reasonable valuation, solid financial strength
and strong earning power.
Invesco S&P MidCap Quality ETF (XMHQ) tracks the S&P
MidCap 400® Quality Index is designed to track high quality stocks
in the S&P MidCap 400 by quality score, which is calculated
based on return on equity, accruals ratio and financial leverage
ratio.
Invesco S&P SmallCap Quality ETF (XSHQ) tracks the S&P
SmallCap 600® Quality Index is designed to measure the 120
highest-quality stocks in the S&P SmallCap 600 on the basis of
their quality score, which is calculated using three fundamental
measures: return on equity, accruals ratio, and financial leverage
ratio.
Invesco S&P MidCap Momentum ETF (XMMO) tracks the S&P
MidCap 400® Momentum is designed to measure the performance of
securities in the S&P MidCap 400 universe that exhibit
persistence in their relative performance.
Invesco S&P SmallCap Momentum ETF (XSMO) tracks the S&P
SmallCap 600® Momentum Index is designed to measure the performance
of securities in the S&P SmallCap 600 universe that exhibit
persistence in their relative performance.
About Risk:
There are risks involved with investing in ETFs, including
possible loss of money. Shares are not actively managed and are
subject to risks similar to those of stocks, including those
regarding short selling and margin maintenance requirements.
Ordinary brokerage commissions apply. The Fund's return may not
match the return of the Underlying Index. The Fund is subject to
certain other risks. Please see the current prospectus for more
information regarding the risk associated with an investment in the
Fund.
Investments focused in a particular sector, such as information
technology, are subject to greater risk, and are more greatly
impacted by market volatility, than more diversified
investments.
Diversification does not guarantee a profit or eliminate the
risk of loss.
Shares are not individually redeemable and owners of the Shares
may acquire those Shares from the Fund and tender those Shares for
redemption to the Fund in Creation Unit aggregations only,
typically consisting of 10,000, 20,000, 25,000, 50,000, 80,000,
100,000 or 150,000 Shares.
The S&P 500 GARP, S&P MidCap 400 GARP, S&P MidCap
400 Quality, S&P SmallCap 600 Quality, S&P MidCap 400
Momentum, S&P SmallCap 600 Momentum and S&P SmallCap 600
Indices are products of S&P Dow Jones Indices LLC or its
affiliates ("SPDJI") and have been licensed for use by Invesco Ltd.
S&P®, S&P 500®, S&P 400®, S&P MidCap 400®, S&P
600®, S&P MidCap 600® are registered trademarks of Standard
& Poor's Financial Services LLC ("S&P"); Dow Jones® is a
registered trademark of Dow Jones Trademark Holdings LLC ("Dow
Jones"); and these trademarks have been licensed for use by SPDJI
and sublicensed for certain purposes by Invesco Ltd. Invesco's ETFS
based on these indices are not sponsored, endorsed, sold or
promoted by SPDJI, Dow Jones, S&P, or their respective
affiliates and none of such parties make any representation
regarding the advisability of investing in such product(s) nor do
they have any liability for any errors, omissions, or interruptions
of the S&P Indices underlying such ETFs.
Before investing, investors should carefully read the
prospectus/summary prospectus and carefully consider the investment
objectives, risks, charges and expenses. For this and more complete
information about the Fund call 800 983 0903 or visit invesco.com
for the prospectus/summary prospectus.
Invesco Distributors, Inc.
NA3471902
04/24
Contact: Stephanie Diiorio,
stephanie.diiorio@invesco.com 212.278.9037
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SOURCE Invesco Ltd.