ETF Pulse Check Invesco Zacks Mid-Cap ETF
ETF EdgeFriday, Jul 4, 2025 9:13 pm ET
3min readThe Invesco Zacks Mid-Cap ETF (CZA) is strategically designed to offer investors exposure to the Zacks Mid-Cap Core Index, focusing on a diversified portfolio of mid-cap U.S. stocks. Utilizing a proprietary, multi-factor approach, CZA aims to outperform standard market-cap indexes by identifying securities with potentially superior risk/return profiles. This ETF distinguishes itself with significant sector tilts, notably overweighting financials while underweighting consumer cyclicals, offering a unique investment avenue in the current market landscape. With the quarterly reconstitution of the index, investors should consider CZA's dynamic portfolio composition and the implications of its sector biases in today's market environment.
Basic Information
The Invesco Zacks Mid-Cap ETF, with the ticker symbol CZA, was issued by Invesco Capital Management LLC on April 2, 2007. It has an expense ratio of 0.69%, reflecting the cost structure associated with managing the fund. The ETF's top 15 holdings include Westinghouse Air Brake with a weight of 2.18%, The Hartford Insurance at 2.11%, and Extra Space Storage at 1.96%, among others, collectively comprising 27.94% of the portfolio. Financials represent the largest sector exposure at 7.67%, followed by materials at 5.36% and industrials at 4.07%. Recent net flow ratios over 7 and 30 days are 0.00% and -0.18%, respectively, indicating a declining investor interest. The average returns stand at 0.68% over six months, 6.93% over one year, and 1.20% over three years, with standard deviations ranging from 3.35% to 7.48%, demonstrating moderate volatility. The maximum return drawdowns over one and three years are negligible, suggesting stability amidst market fluctuations.
News Summary
Recent headlines present a multifaceted landscape for the Invesco Zacks Mid-Cap ETF, intertwining ETF-specific, sector-specific, and macroeconomic narratives. The signing of Trump's "big, beautiful bill," amidst intense debates, introduces potential tariff hikes, with implications across various sectors, including financials and industrials, vital to CZA's holdings. The proposed tariffs and geopolitical tensions, coupled with OPEC+'s considerations on oil production, introduce volatility and uncertainty, affecting sectors like energy and materials. On the macroeconomic front, discussions by central banks, such as the Bank of England, on interest rate policies, signal potential shifts that could impact financial services firms within CZA's portfolio. These developments collectively shape the landscape for investors, influencing sentiment and operational dynamics across the ETF's sector exposures.
Analyst Rating: Sell
The Invesco Zacks Mid-Cap ETF offers a mixed investment proposition, characterized by a relatively high expense ratio of 0.69%, which could deter cost-conscious investors. The fund's capital flow analysis indicates a negative trajectory, with a 30-day net flow ratio of -0.18%, reflecting waning investor interest. Return performance appears modest, with average returns of 0.68% over six months, 6.93% over one year, and 1.20% over three years, suggesting limited growth potential. Despite moderate volatility, evidenced by a standard deviation range between 3.35% and 7.48%, and favorable concentration metrics, with the top 15 holdings accounting for only 27.94% of the portfolio, the ETF's high expense ratio and negative capital flow contribute to an overall "Sell" rating, indicating that investors may find more attractive opportunities elsewhere.
Backtest Scenario
The historical performance of the Invesco Zacks Mid-Cap ETF during the 2018 US-China trade tensions offers insights into its resilience amid tariff hikes. The ETF, focusing on mid-cap stocks through the Zacks Mid-Cap Core Index, typically exhibits different resilience compared to large-cap stocks during such periods. Although specific performance data for CZA during the 2018 tensions is unavailable, its behavior can be inferred from broader market trends and the index it tracks. The Guggenheim predecessor fund's performance post-2018 suggests consistency with the market's response to tariff hikes, emphasizing the complex interplay of sector-specific impacts and investor sentiment. Investors should consider the ETF's sector composition and potential risks associated with external economic shocks in evaluating its performance.
Risk Outlook
The Invesco Zacks Mid-Cap ETF navigates a complex macroeconomic environment marked by geopolitical tensions, tariff pressures, and discussions on interest rate policies. Such factors could significantly impact the ETF's holdings, particularly those with international operations, like State Street and Willis Towers Watson. The financial sector, representing the largest exposure at 7.67%, faces risks from changing borrowing costs and investment returns. Moreover, the ETF's exposure to industrials and materials, totaling over 9%, places it at risk from global supply chain disruptions and inflationary pressures, especially as OPEC+ considers boosting oil production. Liquidity risks are suggested by the muted net flow ratios, reflecting cautious investor sentiment in volatile markets. Overall, CZA's performance outlook hinges on effectively navigating these intertwined risks across its sector exposures.
Conclusion
The Invesco Zacks Mid-Cap ETF presents a cautious investment case, suited for conservative investors mindful of sector-specific and macroeconomic risks. While offering stability and diversification, the ETF's high expense ratio and negative capital flow warrant careful consideration. Investors should monitor geopolitical tensions, interest rate shifts, and sector dynamics closely, as these factors will shape the ETF's future performance.
Basic Information
The Invesco Zacks Mid-Cap ETF, with the ticker symbol CZA, was issued by Invesco Capital Management LLC on April 2, 2007. It has an expense ratio of 0.69%, reflecting the cost structure associated with managing the fund. The ETF's top 15 holdings include Westinghouse Air Brake with a weight of 2.18%, The Hartford Insurance at 2.11%, and Extra Space Storage at 1.96%, among others, collectively comprising 27.94% of the portfolio. Financials represent the largest sector exposure at 7.67%, followed by materials at 5.36% and industrials at 4.07%. Recent net flow ratios over 7 and 30 days are 0.00% and -0.18%, respectively, indicating a declining investor interest. The average returns stand at 0.68% over six months, 6.93% over one year, and 1.20% over three years, with standard deviations ranging from 3.35% to 7.48%, demonstrating moderate volatility. The maximum return drawdowns over one and three years are negligible, suggesting stability amidst market fluctuations.
News Summary
Recent headlines present a multifaceted landscape for the Invesco Zacks Mid-Cap ETF, intertwining ETF-specific, sector-specific, and macroeconomic narratives. The signing of Trump's "big, beautiful bill," amidst intense debates, introduces potential tariff hikes, with implications across various sectors, including financials and industrials, vital to CZA's holdings. The proposed tariffs and geopolitical tensions, coupled with OPEC+'s considerations on oil production, introduce volatility and uncertainty, affecting sectors like energy and materials. On the macroeconomic front, discussions by central banks, such as the Bank of England, on interest rate policies, signal potential shifts that could impact financial services firms within CZA's portfolio. These developments collectively shape the landscape for investors, influencing sentiment and operational dynamics across the ETF's sector exposures.
Analyst Rating: Sell
The Invesco Zacks Mid-Cap ETF offers a mixed investment proposition, characterized by a relatively high expense ratio of 0.69%, which could deter cost-conscious investors. The fund's capital flow analysis indicates a negative trajectory, with a 30-day net flow ratio of -0.18%, reflecting waning investor interest. Return performance appears modest, with average returns of 0.68% over six months, 6.93% over one year, and 1.20% over three years, suggesting limited growth potential. Despite moderate volatility, evidenced by a standard deviation range between 3.35% and 7.48%, and favorable concentration metrics, with the top 15 holdings accounting for only 27.94% of the portfolio, the ETF's high expense ratio and negative capital flow contribute to an overall "Sell" rating, indicating that investors may find more attractive opportunities elsewhere.
Backtest Scenario
The historical performance of the Invesco Zacks Mid-Cap ETF during the 2018 US-China trade tensions offers insights into its resilience amid tariff hikes. The ETF, focusing on mid-cap stocks through the Zacks Mid-Cap Core Index, typically exhibits different resilience compared to large-cap stocks during such periods. Although specific performance data for CZA during the 2018 tensions is unavailable, its behavior can be inferred from broader market trends and the index it tracks. The Guggenheim predecessor fund's performance post-2018 suggests consistency with the market's response to tariff hikes, emphasizing the complex interplay of sector-specific impacts and investor sentiment. Investors should consider the ETF's sector composition and potential risks associated with external economic shocks in evaluating its performance.
Risk Outlook
The Invesco Zacks Mid-Cap ETF navigates a complex macroeconomic environment marked by geopolitical tensions, tariff pressures, and discussions on interest rate policies. Such factors could significantly impact the ETF's holdings, particularly those with international operations, like State Street and Willis Towers Watson. The financial sector, representing the largest exposure at 7.67%, faces risks from changing borrowing costs and investment returns. Moreover, the ETF's exposure to industrials and materials, totaling over 9%, places it at risk from global supply chain disruptions and inflationary pressures, especially as OPEC+ considers boosting oil production. Liquidity risks are suggested by the muted net flow ratios, reflecting cautious investor sentiment in volatile markets. Overall, CZA's performance outlook hinges on effectively navigating these intertwined risks across its sector exposures.
Conclusion
The Invesco Zacks Mid-Cap ETF presents a cautious investment case, suited for conservative investors mindful of sector-specific and macroeconomic risks. While offering stability and diversification, the ETF's high expense ratio and negative capital flow warrant careful consideration. Investors should monitor geopolitical tensions, interest rate shifts, and sector dynamics closely, as these factors will shape the ETF's future performance.
Disclaimer: The news articles available on this platform are generated in whole or in part by artificial intelligence and may not have been reviewed or fact checked by human editors. While we make reasonable efforts to ensure the quality and accuracy of the content, we make no representations or warranties, express or implied, as to the truthfulness, reliability, completeness, or timeliness of any information provided. It is your sole responsibility to independently verify any facts, statements, or claims prior to acting upon them. Ainvest Fintech Inc expressly disclaims all liability for any loss, damage, or harm arising from the use of or reliance on AI-generated content, including but not limited to direct, indirect, incidental, or consequential damages.
Comments
No comments yet