Invesco S&P SmallCap Low Volatility ETF XSLV aggressively pursues small-cap stocks with low volatility. It should offer a smoother ride and better risk/reward profile than the S&P SmallCap 600 Index over the long term. That said, the fund often has exposure to concentrated sources of risk that past volatility alone doesn’t capture, including industry bets and value style risk relative to its benchmark. It warrants a downgrade to a Morningstar Analyst Rating of Bronze from Silver.
Invesco S&P SmallCap Low Volatility ETF XSLV
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Morningstar’s Analysis
The Morningstar Analysis section contains a thorough evaluation of an investment’s merits and drawbacks and often discusses the most important or decisive factors leading to the fund’s overall rating.
The Morningstar Analysis section contains a thorough evaluation of an investment’s merits and drawbacks and often discusses the most important or decisive factors leading to the fund’s overall rating.
Will XSLV outperform in future?
Get our overall rating based on a fundamental assessment of the pillars below.
Process Pillar
The Process Pillar is our assessment of how sensible, clearly defined, and repeatable XSLV’s performance objective and investment process is for both security selection and portfolio construction.
People Pillar
The People Pillar is our evaluation of the XSLV management team’s experience and ability. We find that high-quality management teams deliver superior performance relative to their benchmarks and/or peers.
Parent Pillar
The Parent Pillar is our rating of XSLV’s parent organization’s priorities and whether they’re in line with investors’ interests.
This is a decent strategy, but it may have exposure to hidden sources of risk.
