Invesco S&P 500® Pure Value ETF earns a Morningstar Medalist Rating of Neutral with strength in areas such as People offset by weaker spots such as Process. The portfolio maintains a sizable cost advantage over competitors, priced within the least expensive fee quintile among peers.  

 The strategy gets a Below Average Process Pillar rating. Independent of the rating, analysis of the strategy's portfolio shows it has maintained a significant overweight position in liquidity exposure and an underweight in quality exposure compared with category peers. High liquidity exposure is attributed to stocks with a high trading volume, lending managers more flexibility. And a low quality exposure is rooted in stocks with higher financial leverage and lower profitability. The strategy’s management team earns an Above Average People Pillar rating. 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

PulteGroup

WestRock

Phillips 66

Paramount Global

Western Digital

Lennar

FedEx

Citigroup

General Motors

Valero Energy

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 S&P 500® Pure Value ETF earns a Below Average Process Pillar rating. 

The process benefits from tracking an index. Historical data, like Morningstar's Active/Passive Barometer, finds that passively managed funds have generally outperformed their active counterparts, especially over longer time horizons. However, the rating is weakened by the fund's unremarkable long-term risk-adjusted performance. This can be seen in its 10-year alpha calculated relative to the category average, which suggests that the process has struggled over that period. 

 This strategy leans toward smaller, deeper value companies compared with its average peer in the Large Value Morningstar Category. Examining additional factor exposure, this strategy has held more highly liquid stocks compared to Morningstar Category Peers in the past few years. This gives the managers more flexibility during bear markets to sell without adversely affecting prices. In recent months, the strategy was more exposed to the Liquidity factor compared with its Morningstar Category peers as well. This strategy has also tilted toward low-quality stocks, companies with higher financial leverage and lower profitability over peers in recent years. Such positions do not tend to provide much ballast for a portfolio. Similarly, in recent months, the strategy also had less exposure to the Quality factor than peers. In addition, this strategy has exhibited a tilt toward higher-volatility stocks in these years, meaning companies that have a higher historical standard deviation of returns compared with peers. This orientation tends to pay off most prominently when markets are hot. In this month, the strategy also had more exposure to the Volatility factor over 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 financial services relative to the category average by 15.2 and 3.2 percentage points, respectively. The sectors with low exposure compared to category peers are healthcare and technology, underweight the average by 4.1 and 3.9 percentage points of assets, respectively. The portfolio is positioned across 80 holdings and its assets are more dispersed than the typical peer in the category. In the most recent disclosure, 24.3% of the strategy's assets were concentrated in the top 10 fund holdings, compared to the category average's 27.2%. And finally, in terms of portfolio turnover, this fund trades less frequently than the category’s average, potentially limiting costs to investors.

Below Average

Process

Invesco’s equity team is strong compared with others in the industry, resulting in an Above Average People Pillar rating. There are four managers listed on the fund: Pratik Doshi, Peter Hubbard, Michael Jeanette, Tony Seisser. The team is well equipped, with an average of 11 years of portfolio management experience. Together, they manage a total of 142 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.

Above Average

People

Invesco, with USD 1.3 trillion in AUM, tries to cover a great many bases. The firm succeeds in a number of areas but also has its share of subpar offerings, along with many others somewhere in the middle. The firm retains a Morningstar Parent rating of Average.
Invesco is now 3.5 years past the closing of its merger with OppenheimerFunds. While there were some glitches, overall the process avoided the pitfalls that can accompany such corporate actions. On the positive side, Invesco’s international-equity teams—its EQV team in Texas and the New York-based group inherited from Oppenheimer—remain strong points. The firm’s ETF lineup includes the popular Nasdaq-focused QQQ; passive strategies make up around 30% of Invesco’s AUM. 
However, the extensive U.S.-equity lineup remains a weak link despite manager shuffles aimed at bolstering poor performers. The retirement of Meggan Walsh, who managed the relatively few appealing offerings in that group, didn’t help. Fixed-income offerings run the gamut: The multisector and short-term-bond areas are good, but corporate high-yield is less impressive.
Invesco has a substantial presence outside the U.S., but fund performance has been subpar in Asia, with manager turnover an ongoing concern. In the U.K. and Europe, the picture has brightened, but that region still can’t be considered a strength.

Average

Parent

Invesco S&P 500 Pure Value ETF

RPV tracks an index of primarily large-cap, committee-selected US stocks. The index covers about 33% of the S&P 500's market cap, using three factors to select value stocks.

Launched on 03/01/2006, the Invesco S&P 500 Pure Value ETF (RPV) is a passively managed exchange traded fund designed to provide a broad exposure to the Large Cap Value segment of the US equity market.

Should Invesco S&P 500 Pure Value ETF (RPV) Be on Your Investing Radar?

Invesco S&P 500 Pure Value ETF has declined significantly since early 2023 and has underperformed the S&P 500 index. The valuation of RPV is fair but relatively cheaper compared to growth stocks. I believe RPV has a higher downside risk during economic recessions and a recession is expected to occur in the first half of 2024.

RPV: Downside Risk Could Be Quite High In A Recession

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