Multi-Factor ETF OMFL Outpaces Benchmarks YTD | ETF Trends

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. OMFL is unique in that it shifts from risk off to risk on factor exposure and vice versa based on the market environment.

OMFL has seen $746 million in net flows over a one-month period and $1.3 billion year to date. In 2022, the $3.7 billion fund took in just $497 million in net flows. Meanwhile, in 2021, it accreted $404 million in net flows.

“Invesco has long been a leader with alternatively weighted ETFs. But unlike some other products, OMFL combines multiple factors providing advisors with a more diversified approach. The ETF is more like active management but in a lower cost structure,” Todd Rosenbluth, head of research at VettaFi, said.

Multi-Factor ETF OMFL Has Outperformed Over Various Periods

OMFL charges 29 basis points. The multi-factor ETF tracks the Russell 1000 Invesco Dynamic Multifactor Index. This benchmark weights large caps in the Russell 1000, according to economic cycles and market conditions. These can reflect expansion, slowdown, contraction, or recovery, according to Invesco.

The methodology assigns index constituents a multi-factor score from one of five investment styles: value, momentum, quality, low volatility, and size. Invesco reconstitutes and rebalances both the fund and index based on economic indicator signal changes. This may happen as frequently as monthly.

Year to date OMFL is up 11.1%, outpacing large caps as measured by the Russell 1000 and the S&P 500, which have gained 9.6% and 9.9%, respectively, during the same period.

OMFL is up 62.7% over a three-year period, while the Russell 1000 has climbed 47.4%. Over a five-year period, OMFL has increased 93.5% while the Russell 1000 is up 65.5%, according to YCharts.

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