A strong management team and sound investment process underpin Invesco Russell 1000® Dynamic Mltfct ETF's Morningstar Medalist Rating of Silver. The portfolio maintains a cost advantage over competitors, priced within the least expensive fee quintile among peers.  

 The strategy’s management team earns an Above Average People Pillar rating. The strategy's effective investment approach earns an Above Average Process Pillar rating.  High yield exposure is attributed to holding high dividend-paying or buyback stocks, and is suitable for income seekers outside of fixed-income. And a high liquidity exposure is rooted in stocks with higher trading volumes, lending managers more flexibility. The strategy's parent organization earns the firm an Average Parent Pillar rating. People Pillar and Parent Pillar ratings for this strategy are indirectly assigned by a Morningstar analyst rather than algorithmically derived. Please see the notes following each pillar section for more details. The details of assigning methods can be found in each pillar section.

Analyst Rating

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United Continental Hlds

Leidos Hld

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Morningstar's evaluation of this security's process aims to determine the likelihood that it will outperform its Morningstar Category index on a risk-adjusted basis over the long term. Invesco Russell 1000® Dynamic Mltfct ETF earns an Above Average Process Pillar rating. 

The predominant contributor to the rating is the fund's strong long-term risk-adjusted performance. This can be seen in its five-year alpha calculated relative to the category average, which suggests that the managers have shown skill in their allocation of risk. This fund tracks an index, which also increases its process rating. Historical data, like Morningstar's Active/Passive Barometer, shows that passively managed funds have generally outperformed their active counterparts, especially over longer time horizons. Lastly, the process is limited by the parent firm's five-year risk-adjusted success ratio of 42%. The measure indicates the percentage of a firm's funds that survived and outperformed their respective category's median Morningstar Risk-Adjusted Return for the period. The parent's relatively low success ratio suggests that the firm could do better across its fund lineup.

 This strategy tends to hold smaller, more value-oriented companies than its average peer in the Large Blend Morningstar Category. Examining additional factor exposure, this strategy has continually displayed high-yield exposure compared with Morningstar Category peers during recent years, holding more companies returning cash to shareholders via dividends or buybacks. High-yield stocks tend to be connected to more mature companies earning enough cash to return some to shareholders. At times, however, extreme market pressure can force them to cut their dividends, which hurts stock performance. In recent months, the strategy was more exposed to the Yield factor compared with its Morningstar Category peers as well. Given the high trading volume of holdings, this strategy has been exposed to liquid assets during these years. Such stocks may have less potential upside than illiquid holdings, but they are easier to trade during market downturns. Compared with category peers, the strategy also had more exposure to the Liquidity factor in the most recent month. In addition, this strategy has had a bias away from momentum stocks during these years. Momentum strategies typically bet that stocks that have recently outperformed will continue to do so, and those that have recently underperformed will keep lagging. Avoiding the former and buying the latter could indicate that managers are averse to chasing momentum. In recent months, the strategy also had less Momentum factor exposure than its peers. More information on a fund and its respective category's factor exposure can be found in the Factor Profile module within the Portfolio section. 

 The portfolio is overweight in consumer cyclical and industrials relative to the category average by 9.3 and 7.9 percentage points, respectively. The sectors with low exposure compared to category peers are technology and healthcare, underweight the average by 19.0 and 7.2 percentage points of assets, respectively. The portfolio is positioned across 378 holdings and is less top-heavy than peers. Specifically, 8.2% of the fund’s assets are concentrated within the top 10 fund holdings, compared to the category average's 48.8%. And in closing, in terms of portfolio turnover, looking at year-over-year movements, 350% of the fund's holdings have changed, whether through increasing, decreasing, or changing a position.

Above Average

Process

Invesco Russell 1000® Dynamic Mltfct ETF benefits considerably from its team, earning it an Above Average People Pillar rating. There are four managers listed on the fund: Michael Jeanette, Peter Hubbard, Tony Seisser, Pratik Doshi. Experience on the team is abundant, with 12 years of average portfolio management experience. Together, they manage a total of 144 strategies, with a Bronze asset-weighted average Morningstar Medalist Rating, indicating the potential to deliver positive alpha relative to the category median in aggregate.  

 Note: This People Pillar rating is indirectly assigned by an analyst. Morningstar analysts evaluate the People Pillar for passive products at the brand level and may also differentiate by asset class. There is at least one other passive strategy at the firm that is covered by a Morningstar analyst, so the People Pillar rating of the fund is inherited from the rating that the Morningstar analyst assigned to investment vehicles under the same brand name.

People

Invesco succeeds in a number of areas but also has its share of subpar offerings, along with many others that land somewhere in the middle. A mid-2023 change of CEO, from longtime chief Marty Flanagan to veteran Invesco executive Andrew Schlossberg, is noteworthy, and several other executives retired or departed in 2023. Portfolio-manager shuffles aimed at bolstering poor performers, which began under Flanagan, have continued under Schlossberg, who told Morningstar his most important aim is bolstering “investment quality.” However, major changes of direction or approach are unlikely. The firm retains a Morningstar Parent rating of Average. 
Invesco’s international-equity teams in Texas and New York remain solid. However, the extensive U.S.-equity lineup needs improvement. Fixed-income offerings run the gamut: The multisector and short-term-bond areas are good, but corporate high-yield is less impressive. The firm’s exchange-traded fund lineup includes the popular Nasdaq-focused QQQ; passive strategies make up around 37% of Invesco’s assets under management. Invesco has not been averse to trying new types of strategies, and it was among the firms that immediately launched a spot bitcoin ETF after SEC approval in early 2024.
The picture outside the United States is mixed. Fund performance has been subpar in Asia, and while the picture has brightened in the United Kingdom and Europe, that region still can’t be considered a strength.

Average

Parent

Invesco Russell 1000 Dynamic Multifactor ETF

OMFL tracks an index of US large-cap stocks selected by a combination of five investment factors, which are weighted based on current macroeconomic conditions.

OMFL implements one of four portfolio regimes based on a model's assessment of the business cycle. Factors emphasized may include size, value, momentum, volatility, and quality. OMFL was the top-performing all/large-cap blend ETF for the five years ending December 2022. However, its ranking since is only #67/117, providing more evidence that past performance is unreliable. However, it's also unfair to use past performance to justify selling. A more reasonable approach is to assess OMFL's fundamentals and decide if you believe the risk exceeds the reward.

Is OMFL's Approach Really A Game Changer? Conviction Without Certainty

Making its debut on 11/08/2017, smart beta exchange traded fund Invesco Russell 1000 Dynamic Multifactor ETF (OMFL) provides investors broad exposure to the Style Box - Large Cap Growth category of the market.

Is Invesco Russell 1000 Dynamic Multifactor ETF (OMFL) a Strong ETF Right Now?

Designed to provide broad exposure to the Large Cap Growth segment of the US equity market, the Invesco Russell 1000 Dynamic Multifactor ETF (OMFL) is a passively managed exchange traded fund launched on 11/08/2017.

Should Invesco Russell 1000 Dynamic Multifactor ETF (OMFL) Be on Your Investing Radar?

OMFL has an index-based, macro-centered multifactor strategy that is supposed to recalibrate the Russell 1000 to benefit from the market environment.

OMFL: Contrarian Factor Mix, Remains A Buy

Invesco Russell 1000 Dynamic Multifactor ETF takes a dynamic management approach tied to the economic cycle.

OMFL: Strong Story, No Alpha

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Invesco's large-cap dynamic multifactor ETF has garnered significant investor attention in 2023. The Invesco Russell 1000 Dynamic Multifactor ETF (OMFL) has seen consistently strong inflows year to date, reaching $2.6 billion in net flows in 2023 as of December 11.

Invesco's Dynamic Multifactor ETF Sees Strong Flows in 2023

Invesco Russell 1000 Dynamic Multifactor ETF is a diversified fund focused on value, momentum, and low-volatility stocks. If you look back over the past three years, OMFL ETF has outperformed the S&P 500 Index by 200 basis points. The Fund is actively managed and has a low expense ratio of 0.29%, with a portfolio that is adjusted based on the economic cycle.

OMFL: A One Ticker SWAN?

OMFL is a Russell 1000 Multifactor ETF that routinely changes according to a proprietary model's assessment of the economic cycle. My assessment is that OMFL is still modeling the expansion phase, but since my review in July, it's substituted low-quality Regional Banks with higher-quality Technology stocks. The resulting portfolio is attractive. My fundamental analysis reveals a portfolio with a lower five-year beta, a higher profit score, and earnings per share growth rate rivaling the Russell 1000.

Trimming The Fat: OMFL Sheds Regional Banks, Boosts Quality And Growth With Tech

The Invesco Russell 1000 Dynamic Multifactor ETF is an actively-managed fund that invests in companies listed on the Russell 1000 index. The fund uses an economic cycle-based management approach, delivering impressive returns with low volatility.

Unraveling The Merits Of Invesco: Why OMFL Is A Great ETF

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Investors were net purchasers of fund assets (including those of conventional funds and ETFs) for the second week in a row, injecting a net $9.6 billion for the LSEG Lipper fund-flows week ended Wednesday, September 6. Equity ETFs witnessed net outflows for the second week in three, handing back a little more than $1.4 billion for the most recent fund flows week. For the first week in three, taxable fixed income ETFs experienced net outflows, handing back $1.1 billion this week.

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The growing application of actively managed ETFs makes them highly lucrative investment products, given the developing opportunity set within the modern financial markets.

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The Invesco Russell 1000® Dynamic Multifactor ETF's active approach provides a solid diversification strategy. Nevertheless, its conviction often leads to significant drawdowns. Intuitively, the OMFL ETF's bet on small-cap value makes sense. However, we believe the vehicle's portfolio managers are ignoring the possibility of a hard economic landing. We think the OMFL ETF's value and blended exposure is a clever move. However, its cyclical sector exposure is a risky bet in today's economic environment.

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Big tech (specifically the magnificent seven) has driven almost all of the market's gains in 2023. Valuations have gotten absurd to the point where it's the worst time in 22 years to buy the S&P relative to bonds. Fortunately, something great is always on sale! GARP (growth at a reasonable price) ETFs are plentiful.

Big Tech Is About To Fry, But OMFL Is Likely To Fly

Invesco Russell 1000® Dynamic Multifactor ETF tracks a rules-based Index that selects U.S. securities based on five factors: size, value, momentum, low volatility, and quality. Factors are emphasized based on the economic cycle. Portfolio turnover is high because OMFL has been switching between the expansion and slowdown phases, which target entirely different factors. This month, 84% of holdings by weight were substituted. However off-putting that may be, the strategy is working. OMFL is a top-performing ETF, and features an extremely reasonable 0.29% expense ratio for what's effectively an actively-managed fund.

OMFL: Economic Cycle Prompts 84% Turnover For This Top Multi-Factor ETF

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Factor leadership is akin to sector leadership in that the five primary investment factors — low volatility, momentum, quality, small size, and value — often rotate in terms of year-to-year leadership. That can make life difficult for novice, factor-enthused investors because each of those factors holds its own source of appeal.

A Multifactor ETF With Long-Term Merit

The Invesco Russell 1000 Dynamic Multifactor ETF (OMFL) outperforms the iShares Russell 1000 ETF (IWB) in both bull and bear markets. OMFL dynamically adjusts its factor weights based on the current economic cycle, making it more aggressive during Recovery and Expansion phases and more defensive during Slowdown and Contraction phases. The fund's 5-year average return of 13.8% per annum ranks it in the top percentile compared to the Large Blend category on Morningstar.

OMFL: Top Performing Business Cycle Investing Fund

A multi-factor ETF in Invesco's lineup has seen considerable investor attention in recent weeks. The Invesco Russell 1000 Dynamic Multifactor ETF (OMFL) has stood out as investors look for large-cap exposure fit for a complicated economic environment.

Multi-Factor ETF OMFL Outpaces Benchmarks YTD

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Investors are increasingly looking to the Invesco Russell 1000 Dynamic Multifactor ETF (OMFL) and the Invesco S&P 500 Low Volatility ETF (SPLV) as smart beta ETFs continue to play a significant role in portfolios. OMFL and SPLV are the top two funds by four-week flows across Invesco's range of ETFs.

OMFL, SPLV Lead in Investor Interest Across Invesco ETFs

The Invesco Russell 1000 Dynamic Multifactor ETF (OMFL) has seen a dramatic surge in investor interest in recent weeks. Investors have recently looked for an alternative to market cap weight strategies believing that market breadth will expand beyond a handful of mega-cap growth stocks, according to Todd Rosenbluth, head of research at VettaFi.

Invesco Multi-Factor ETF OMFL Sees Spike in Flows

OMFL is a multifactor ETF that reconstitutes as frequently as monthly based on where we are in the business cycle: recovery, expansion, slowdown, and contraction. Fees are fair at 0.29%, considering how OMFL's five-year trailing returns were among the best of any large-cap fund, including growth-oriented ones.

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