Looking for broad exposure to the Large Cap Growth segment of the US equity market? You should consider the Invesco S&P 500 Pure Growth ETF (RPG), a passively managed exchange traded fund launched on 03/01/2006.
The fund is sponsored by Invesco. It has amassed assets over $1.54 billion, making it one of the average sized ETFs attempting to match the Large Cap Growth segment of the US equity market.
Why Large Cap Growth
Companies that find themselves in the large cap category typically have a market capitalization above $10 billion. Overall, they are usually a stable option, with less risk and more sure-fire cash flows than mid and small cap companies.
While growth stocks do boast higher than average sales and earnings growth rates, and they are expected to grow faster than the wider market, investors should note these kinds of stocks have higher valuations. Additionally, growth stocks have a greater level of risk associated with them. 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
Expense ratios are an important factor in the return of an ETF and in the long term, cheaper funds can significantly outperform their more expensive counterparts, other things remaining the same.
Annual operating expenses for this ETF are 0.35%, putting it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 0.21%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Information Technology sector--about 38% of the portfolio. Consumer Discretionary and Industrials round out the top three.
Looking at individual holdings, Nvidia Corp (NVDA) accounts for about 4.77% of total assets, followed by Royal Caribbean Cruises Ltd (RCL) and Palantir Technologies Inc (PLTR).
The top 10 holdings account for about 29.49% of total assets under management.
Performance and Risk
RPG seeks to match the performance of the S&P 500 Pure Growth Index before fees and expenses. The S&P 500 Pure Growth Index measures the performance of securities that exhibit strong growth characteristics in the S&P 500 Index.
The ETF has added about 1.89% so far this year and is up roughly 35.34% in the last one year (as of 01/06/2025). In the past 52-week period, it has traded between $31.69 and $44.07.
The ETF has a beta of 1.14 and standard deviation of 23.41% for the trailing three-year period, making it a medium risk choice in the space. With about 68 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco S&P 500 Pure Growth ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, RPG is a great option for investors seeking exposure to the Style Box - Large Cap Growth segment of the market. There are other additional ETFs in the space that investors could consider as well.
The Vanguard Growth ETF (VUG) and the Invesco QQQ (QQQ) track a similar index. While Vanguard Growth ETF has $155.71 billion in assets, Invesco QQQ has $323.43 billion. VUG has an expense ratio of 0.04% and QQQ charges 0.20%.
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.
Want key ETF info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week.
Get it free >>Invesco S&P 500 Pure Growth ETF (RPG): ETF Research Reports
Royal Caribbean Cruises Ltd. (RCL) : Free Stock Analysis Report
NVIDIA Corporation (NVDA) : Free Stock Analysis Report
Invesco QQQ (QQQ): ETF Research Reports
Vanguard Growth ETF (VUG): ETF Research Reports
Palantir Technologies Inc. (PLTR) : Free Stock Analysis Report
To read this article on Zacks.com click here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
