Invesco S&P Smallcap 600 Pure Growth ETF (RZG) Covered Calls

The Invesco S&P SmallCap 600 Pure Growth ETF (RZG) is a factor-weighted fund that targets the strongest growth stocks within the S&P SmallCap 600 Index. It uses a "pure style" methodology to select and weight companies based on high sales growth, earnings-to-price ratios, and price momentum.

You can sell covered calls on Invesco S&P Smallcap 600 Pure Growth ETF to lower risk and earn monthly income. Born To Sell's covered call screener gives you customized search capabilities across all possible covered calls but here are a couple of examples for RZG (prices last updated Mon 2:25 PM ET):

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Core Business and Products

The Invesco S&P SmallCap 600 Pure Growth ETF (RZG) is a specialized "smart beta" vehicle that provides concentrated exposure to the most aggressive growth segment of the U.S. small-cap market. Unlike standard growth ETFs that may include "blend" stocks, RZG tracks the S&P SmallCap 600® Pure Growth Index. This index uses a proprietary scoring system to select only those companies with the highest "growth scores" based on three factors: three-year sales per share growth, the three-year ratio of earnings per share change to price per share, and 12-month price momentum.

As of 2026, the fund holds approximately 130 stocks, with a heavy tilt toward Healthcare (23%), Industrials (22%), and Information Technology (15%). Its "product" is this high-conviction, fundamental weighting scheme, where stocks with the strongest growth characteristics receive higher proportional weights. Current top holdings include technology and healthcare innovators such as ACM Research, Clear Secure, TransMedics Group, and Powell Industries.

Competitive Landscape

RZG competes in the crowded small-cap growth arena, where it distinguishes itself through its "pure" factor concentration. However, it faces stiff competition from broader and lower-cost alternatives. Primary competitors include:

1. iShares Russell 2000 Growth ETF: The liquid industry heavyweight for small-cap growth. It is the primary choice for institutional traders and offers the deepest options market in the category.

2. SPDR S&P 600 Small Cap Growth ETF: A direct benchmark rival that tracks the standard (non-pure) growth version of the S&P 600. It is often preferred for its significantly lower expense ratio (0.15% vs. RZG’s 0.35%).

3. Vanguard Small-Cap Growth ETF: A massive, low-cost competitor (0.07% expense ratio) that provides broad exposure to small-cap growth, making it a staple for long-term "buy-and-hold" investors.

4. iShares S&P Small-Cap 600 Growth ETF: A top-tier peer that tracks the same index universe as RZG but uses traditional market-cap weighting, resulting in lower volatility.

5. iShares Morningstar Small-Cap Growth ETF (ISCG): An ultra-low-cost alternative (0.06% expense ratio). Note: while highly liquid for trading shares, it lacks a functional options market for covered call strategies.

Strategic Outlook and Innovation

The strategic value of RZG in 2026 lies in its ability to capture "alpha" during periods of rapid economic expansion or sector-specific bull runs. Its "pure" methodology ensures that it remains a high-beta vehicle, often outperforming during aggressive "risk-on" cycles. In 2026, the fund has benefited significantly from the AI-driven industrial re-shoring trend and breakthroughs in biotechnology, as many of its constituents are small-scale suppliers to these burgeoning global themes.

Innovation for RZG is found in its annual rebalancing, which prevents "growth drift" by strictly pruning companies that no longer meet its rigorous factor requirements. For investors, RZG is a technically optionable tool. While it has an active options chain, liquidity is markedly lower than the Russell 2000-based **IWO**. Nevertheless, for those focused on the S&P 600 "pure" style, it remains a viable candidate for covered call writing to capture high premiums generated by its volatile, small-cap growth components.

Want more examples? RYTM Covered Calls | RZV Covered Calls