We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Is Invesco Russell 1000 Equal Weight ETF (EQAL) a Strong ETF Right Now?
Read MoreHide Full Article
Designed to provide broad exposure to the Style Box - Large Cap Blend category of the market, the Invesco Russell 1000 Equal Weight ETF (EQAL - Free Report) is a smart beta exchange traded fund launched on 12/23/2014.
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.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
Managed by Invesco, EQAL has amassed assets over $700.62 million, making it one of the larger ETFs in the Style Box - Large Cap Blend. Before fees and expenses, this particular fund seeks to match the performance of the Russell 1000 Equal Weight Index.
The Russell 1000 Equal Weight Index is composed of securities in the Russell 1000 Index and is equally weighted across nine sector groups with each security within the sector receiving equal weight.
Cost & Other Expenses
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
With one of the cheaper products in the space, this ETF has annual operating expenses of 0.20%.
It has a 12-month trailing dividend yield of 1.52%.
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 12.10% of the portfolio, the fund has heaviest allocation to the Information Technology sector; Energy and Materials round out the top three.
Looking at individual holdings, Verizon Communications Inc (VZ - Free Report) accounts for about 0.51% of total assets, followed by T-Mobile Us Inc (TMUS - Free Report) and At&t Inc (T - Free Report) .
EQAL's top 10 holdings account for about 4.76% of its total assets under management.
Performance and Risk
So far this year, EQAL has lost about -13.24%, and is down about -5.25% in the last one year (as of 05/13/2022). During this past 52-week period, the fund has traded between $40.76 and $48.05.
The ETF has a beta of 1.12 and standard deviation of 25.06% for the trailing three-year period, making it a medium risk choice in the space. With about 1015 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco Russell 1000 Equal Weight ETF is a reasonable option for investors seeking to outperform the Style Box - Large Cap Blend segment of the market. However, there are other ETFs in the space which investors could consider.
IShares Core S&P 500 ETF (IVV - Free Report) tracks S&P 500 Index and the SPDR S&P 500 ETF (SPY - Free Report) tracks S&P 500 Index. IShares Core S&P 500 ETF has $278.78 billion in assets, SPDR S&P 500 ETF has $355.91 billion. IVV has an expense ratio of 0.03% and SPY charges 0.09%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - Large Cap Blend.
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.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Is Invesco Russell 1000 Equal Weight ETF (EQAL) a Strong ETF Right Now?
Designed to provide broad exposure to the Style Box - Large Cap Blend category of the market, the Invesco Russell 1000 Equal Weight ETF (EQAL - Free Report) is a smart beta exchange traded fund launched on 12/23/2014.
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.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
Managed by Invesco, EQAL has amassed assets over $700.62 million, making it one of the larger ETFs in the Style Box - Large Cap Blend. Before fees and expenses, this particular fund seeks to match the performance of the Russell 1000 Equal Weight Index.
The Russell 1000 Equal Weight Index is composed of securities in the Russell 1000 Index and is equally weighted across nine sector groups with each security within the sector receiving equal weight.
Cost & Other Expenses
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
With one of the cheaper products in the space, this ETF has annual operating expenses of 0.20%.
It has a 12-month trailing dividend yield of 1.52%.
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 12.10% of the portfolio, the fund has heaviest allocation to the Information Technology sector; Energy and Materials round out the top three.
Looking at individual holdings, Verizon Communications Inc (VZ - Free Report) accounts for about 0.51% of total assets, followed by T-Mobile Us Inc (TMUS - Free Report) and At&t Inc (T - Free Report) .
EQAL's top 10 holdings account for about 4.76% of its total assets under management.
Performance and Risk
So far this year, EQAL has lost about -13.24%, and is down about -5.25% in the last one year (as of 05/13/2022). During this past 52-week period, the fund has traded between $40.76 and $48.05.
The ETF has a beta of 1.12 and standard deviation of 25.06% for the trailing three-year period, making it a medium risk choice in the space. With about 1015 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco Russell 1000 Equal Weight ETF is a reasonable option for investors seeking to outperform the Style Box - Large Cap Blend segment of the market. However, there are other ETFs in the space which investors could consider.
IShares Core S&P 500 ETF (IVV - Free Report) tracks S&P 500 Index and the SPDR S&P 500 ETF (SPY - Free Report) tracks S&P 500 Index. IShares Core S&P 500 ETF has $278.78 billion in assets, SPDR S&P 500 ETF has $355.91 billion. IVV has an expense ratio of 0.03% and SPY charges 0.09%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - Large Cap Blend.
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.