Should Invesco S&P 500 Revenue ETF (RWL) Be on Your Investing Radar?

The Invesco S&P 500 Revenue ETF (RWL) is designed to give investors wide-ranging access to the Large Cap Value segment of the U.S. equity market. This passively managed exchange-traded fund was launched on February 22, 2008. Sponsored by Invesco, RWL has accumulated over $5.03 billion in assets, making it a significant player among ETFs targeting the Large Cap Value category.

Why Consider Large Cap Value?

Large cap companies are typically defined as those with a market capitalization exceeding $10 billion. These companies are generally seen as stable investments, offering less risk and more consistent cash flows compared to mid and small cap firms. Value stocks usually exhibit lower than average price-to-earnings (P/E) and price-to-book (P/B) ratios, alongside lower sales and earnings growth rates. Historically, value stocks have outperformed their growth counterparts across various market conditions, although they may lag during an exceptionally strong bull market.

Understanding Costs

When evaluating an ETF's total return, it's essential to consider its expense ratio, as lower-cost funds can greatly outshine their more expensive peers over time if other factors remain consistent. The Invesco S&P 500 Revenue ETF has an annual operating expense ratio of 0.39%, which is comparable to most funds in this sector. As of recent data, the ETF also boasts a 12-month trailing dividend yield of 1.35%.

Sector Allocations and Top Holdings

One of the benefits of investing in ETFs is their capacity to provide diversified exposure, thereby reducing individual stock risk. However, it's crucial to examine a fund’s underlying holdings before making an investment decision. Most ETFs are transparent about their holdings, often disclosing them daily.

The Invesco S&P 500 Revenue ETF has its largest allocation—approximately 19.40%—in the Healthcare sector, followed closely by Financials and Consumer Staples. Among its individual holdings, Walmart Inc. (WMT) represents around 3.84% of total assets, followed by Amazon.com Inc. (AMZN) and UnitedHealth Group Inc. (UNH). The top 10 holdings combined account for about 23.27% of the fund's total assets under management.

Performance Metrics and Risk Assessment

This ETF strives to mirror the performance of the OFI Revenue Weighted Large Cap Index prior to fees and expenses. The S&P 500 Revenue-Weighted Index utilizes a rules-based methodology to adjust the weighting of the securities based on the revenue generated by the companies included in the parent index, with a cap of 5% per company.

Since the start of the current year, RWL has increased by approximately 5.78% and has risen about 20.61% over the past year, as of mid-February 2025. Its performance in the last 52 weeks has fluctuated between $88.24 and $104.10.

With a beta of 0.96 and a standard deviation of 14.84% over the trailing three-year period, RWL is categorized as having a medium risk profile. Containing around 504 different holdings helps mitigate risks associated with individual companies.

Looking at Alternatives

The Invesco S&P 500 Revenue ETF holds a Zacks ETF Rank of 3 (Hold), which reflects factors such as expected return, expense ratio, and momentum. This suggests that RWL is a solid option for investors seeking exposure to the Large Cap Value section of the market. Prospective investors might also consider alternative ETFs in this space.

Some notable options include the Schwab U.S. Dividend Equity ETF (SCHD) and the Vanguard Value ETF (VTV), which follow similar market indices. The Schwab ETF has approximately $67.92 billion in assets, while Vanguard's version has about $136.06 billion. SCHD charges an expense ratio of 0.06%, and VTV charges 0.04%.

Final Thoughts

For long-term investors, passively managed ETFs such as RWL can be an excellent option. These investing vehicles are favored among both institutional and retail investors because of their low costs, transparency, flexibility, and tax efficiency.

To further understand this product and explore other ETF options, it's beneficial to research those that align with your investment goals, as well as read about the latest developments in the ETF investment landscape.

ETF, Investment, Finance