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Is Invesco S&P 500 Equal Weight Industrials ETF (RGI) a Strong ETF Right Now?
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A smart beta exchange traded fund, the Invesco S&P 500 Equal Weight Industrials ETF debuted on 11/01/2006, and offers broad exposure to the Industrials ETFs category of the market.
What Are Smart Beta ETFs?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.
Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
RGI is managed by Invesco, and this fund has amassed over $451.98 million, which makes it one of the average sized ETFs in the Industrials ETFs. This particular fund seeks to match the performance of the S&P 500 Equal Weight Industrials Index before fees and expenses.
The S&P 500 Equal Weight Industrials Index equally weights stocks in the industrials sector of the S&P 500 Index.
Cost & Other Expenses
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
Annual operating expenses for this ETF are 0.40%, making it one of the cheaper products in the space.
RGI's 12-month trailing dividend yield is 0.74%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
Representing 100% of the portfolio, the fund has heaviest allocation to the Industrials sector.
When you look at individual holdings, Norfolk Southern Corp (NSC - Free Report) accounts for about 1.58% of the fund's total assets, followed by Old Dominion Freight Line Inc (ODFL - Free Report) and Csx Corp (CSX - Free Report) .
The top 10 holdings account for about 15.18% of total assets under management.
Performance and Risk
So far this year, RGI has lost about -1.50%, and was up about 9.45% in the last one year (as of 03/30/2022). During this past 52-week period, the fund has traded between $175.67 and $200.30.
RGI has a beta of 1.21 and standard deviation of 26.31% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 75 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco S&P 500 Equal Weight Industrials ETF is a reasonable option for investors seeking to outperform the Industrials ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
Vanguard Industrials ETF (VIS - Free Report) tracks MSCI US Investable Market Industrials 25/50 Index and the Industrial Select Sector SPDR ETF (XLI - Free Report) tracks Industrial Select Sector Index. Vanguard Industrials ETF has $4.89 billion in assets, Industrial Select Sector SPDR ETF has $16.47 billion. VIS has an expense ratio of 0.10% and XLI charges 0.10%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Industrials ETFs.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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Is Invesco S&P 500 Equal Weight Industrials ETF (RGI) a Strong ETF Right Now?
A smart beta exchange traded fund, the Invesco S&P 500 Equal Weight Industrials ETF debuted on 11/01/2006, and offers broad exposure to the Industrials ETFs category of the market.
What Are Smart Beta ETFs?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.
Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
RGI is managed by Invesco, and this fund has amassed over $451.98 million, which makes it one of the average sized ETFs in the Industrials ETFs. This particular fund seeks to match the performance of the S&P 500 Equal Weight Industrials Index before fees and expenses.
The S&P 500 Equal Weight Industrials Index equally weights stocks in the industrials sector of the S&P 500 Index.
Cost & Other Expenses
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
Annual operating expenses for this ETF are 0.40%, making it one of the cheaper products in the space.
RGI's 12-month trailing dividend yield is 0.74%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
Representing 100% of the portfolio, the fund has heaviest allocation to the Industrials sector.
When you look at individual holdings, Norfolk Southern Corp (NSC - Free Report) accounts for about 1.58% of the fund's total assets, followed by Old Dominion Freight Line Inc (ODFL - Free Report) and Csx Corp (CSX - Free Report) .
The top 10 holdings account for about 15.18% of total assets under management.
Performance and Risk
So far this year, RGI has lost about -1.50%, and was up about 9.45% in the last one year (as of 03/30/2022). During this past 52-week period, the fund has traded between $175.67 and $200.30.
RGI has a beta of 1.21 and standard deviation of 26.31% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 75 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco S&P 500 Equal Weight Industrials ETF is a reasonable option for investors seeking to outperform the Industrials ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
Vanguard Industrials ETF (VIS - Free Report) tracks MSCI US Investable Market Industrials 25/50 Index and the Industrial Select Sector SPDR ETF (XLI - Free Report) tracks Industrial Select Sector Index. Vanguard Industrials ETF has $4.89 billion in assets, Industrial Select Sector SPDR ETF has $16.47 billion. VIS has an expense ratio of 0.10% and XLI charges 0.10%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Industrials ETFs.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.