Value Focus in US Small Caps: Invesco’s Pure-Value ETF in the Spotlight for 2026

As of mid-February 2026, market participants are turning renewed attention to the Invesco S&P SmallCap 600 Pure Value ETF, ticker RZV, as the environment for smaller, undervalued firms shifts. While headline risk often centers on larger stocks, the small-cap value segment offers a distinct approach for the year ahead: a disciplined emphasis on companies with solid underlying fundamentals. The question for investors becomes which drivers will most influence performance in the months to come.

Focus on cyclically oriented segments

RZV is designed to tilt toward stocks that appear undervalued by traditional metrics such as price-to-book and price-to-earnings ratios. The fund currently comprises roughly 165 holdings, delivering diversification with clear thematic concentrations. At the end of January 2026, cyclical consumer goods represent about 30% of the portfolio, while industrials exceed 17%. Additional emphasis sits in the materials and energy sectors.

This sector mix makes the fund particularly sensitive to the health of the US domestic economy. Investors anticipate that smaller companies could benefit disproportionately from steadier industrial activity and healthier consumer demand.

Annual rebalancing on the horizon

A key upcoming event over the next several months is the annual rebalancing of the underlying index. The process reassesses the value characteristics of all constituents within the S&P SmallCap 600 and adjusts weights accordingly. Because the most pronounced value signals receive larger allocations, this rebalancing can meaningfully alter the ETF?s sector distribution.

Beyond internal reweighting, broader macro factors will shape the outlook. Trends in inflation and expectations for interest rates are especially relevant for smaller firms, many of which carry higher leverage. In general, a stable economic backdrop tends to favor domestically oriented companies over globally focused multinationals.