Invesco Russell 2000 Dynamic Multifactor ETF

Invesco Russell 2000 Dynamic Multifactor ETF (OMFS) tracks an index built from the Russell 2000's small US companies. It leans toward different stock traits, such as value, momentum, quality or low volatility, depending on Invesco's monthly read of the economic cycle. Its 0.39% expense ratio is the highest of nine similar small-cap funds compared, whose average is 0.15%. Through late October 2026, it trailed plain Russell 2000 funds like VTWO and IWM over one and three years.

• Over the year to Oct 27, 2026, OMFS returned +13.6%, 8th of 9 among similar funds.
• Its 5-year annualized return was +5.7%.
• Its worst full calendar year was 2022 (-17.3%); its best was 2021 (+28.6%).
• The deepest fall in its price history was 29.2% (Nov 12, 2021 to Sep 30, 2022), recovered by Nov 8, 2024.

As of Aug 31, 2026, the fund held 1,111 securities; the ten largest made up 11.99% of assets. It also reported 33.14% in a money-market fund, most likely cash collateral from lending out shares rather than uninvested money.

• Over the three months to Aug 31, 2026, investors withdrew a net $10.3M (creations minus redemptions, per the N-PORT report).
• Monthly total returns reported for that quarter: +5.26%, -2.04%, +0.23%.

OMFS aims to track the Russell 2000 Invesco Dynamic Multifactor Index, which FTSE Russell runs. The index starts with the Russell 2000, about 2,000 small US companies. It then favors stocks that show certain "factors," which are traits linked to risk and return. There are five: value (cheap compared with cash flow, earnings and sales), momentum (strong returns over the past 11 months), quality (profitable with manageable debt), low volatility (steadier weekly prices over five years) and size (smaller companies).

The unusual part is the timing. Each month, Invesco Indexing, a company affiliated with the fund's adviser, tells FTSE Russell which of four economic stages it sees: recovery, expansion, slowdown or contraction. It bases that call on indicators such as manufacturing surveys, labor market conditions, monetary conditions and consumer sentiment. Each stage comes with a preset mix of two or three factors. Because an Invesco affiliate makes this call, the fund relies more on judgment than a plain index fund does.

Each stock gets a combined factor score. Its weight is that score multiplied by its weight in the Russell 2000. Stocks with weak scores or very small weights are dropped, and a cap keeps any single stock from getting too large. As of October 31, 2025, the index held 1,432 stocks, and the fund buys all of them in the same proportions. Portfolio turnover was 65%, so the fund trades a lot internally.

• OMFS charges 0.39% a year, versus an average of 0.15% for the similar funds below (9th of 9, cheapest first).
• Using the prospectus's standard example, $10,000 invested would cost about $40 in the first year and $493 over 10 years (assuming a 5% annual return).

It is a pricier small-company fund whose factor tilts change with economic signals, so it fits best as a small add-on to a broader core.

OMFS could add small-company exposure with a factor tilt to a portfolio built around large-company or total-market funds. It launched in 2017, so it has no record from 2008. According to its prospectus, it lost 33.16% in the first quarter of 2020 and gained 38.82% in the fourth quarter. Its worst calendar year was 2022, when it fell 17.31%. Its deepest drop was 29.2%, from November 12, 2021 to September 30, 2022, and it took about 25 months to recover, until November 8, 2024. Someone who had to sell shares or draw cash during that stretch would have sold at a loss.

The fund yielded 1.28% as of October 27, 2026, and pays quarterly, so it is not built for income. In the SEC's standard example ($10,000 invested, 5% yearly return), costs come to $40 after one year and $493 after ten. Past results don't predict future ones, and a plan should look at the whole portfolio, not one fund.

Matched by holdings overlap from the latest N-PORT reports.