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Is Invesco S&P 500 Equal Weight Technology ETF (RYT) a Strong ETF Right Now?
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Designed to provide broad exposure to the Technology ETFs category of the market, the Invesco S&P 500 Equal Weight Technology ETF is a smart beta exchange traded fund launched on 11/01/2006.
What Are Smart Beta ETFs?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well 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.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
The fund is managed by Invesco, and has been able to amass over $2.35 billion, which makes it one of the larger ETFs in the Technology ETFs. This particular fund, before fees and expenses, seeks to match the performance of the S&P 500 Equal Weight Information Technology Index.
The S&P 500 Equal Weight Information Technology Index equally weights stocks in the information technology sector of the S&P 500 Index.
Cost & Other Expenses
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Annual operating expenses for RYT are 0.40%, which makes it one of the cheaper products in the space.
It's 12-month trailing dividend yield comes in at 0.63%.
Sector Exposure and Top Holdings
Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.
Representing 100% of the portfolio, the fund has heaviest allocation to the Information Technology sector.
Taking into account individual holdings, Citrix Systems Inc accounts for about 1.91% of the fund's total assets, followed by Nortonlifelock Inc and Jack Henry & Associates Inc (JKHY - Free Report) .
The top 10 holdings account for about 16.76% of total assets under management.
Performance and Risk
The ETF has lost about -22.42% and is down about -7.48% so far this year and in the past one year (as of 05/24/2022), respectively. RYT has traded between $243.91 and $327.55 during this last 52-week period.
RYT has a beta of 1.14 and standard deviation of 28.52% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 76 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco S&P 500 Equal Weight Technology ETF is an excellent option for investors seeking to outperform the Technology ETFs segment of the market. There are other ETFs in the space which investors could consider as well.
Technology Select Sector SPDR ETF (XLK - Free Report) tracks Technology Select Sector Index and the Vanguard Information Technology ETF (VGT - Free Report) tracks MSCI US Investable Market Information Technology 25/50 Index. Technology Select Sector SPDR ETF has $39.88 billion in assets, Vanguard Information Technology ETF has $42.30 billion. XLK has an expense ratio of 0.10% and VGT 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 Technology 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 Technology ETF (RYT) a Strong ETF Right Now?
Designed to provide broad exposure to the Technology ETFs category of the market, the Invesco S&P 500 Equal Weight Technology ETF is a smart beta exchange traded fund launched on 11/01/2006.
What Are Smart Beta ETFs?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well 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.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
The fund is managed by Invesco, and has been able to amass over $2.35 billion, which makes it one of the larger ETFs in the Technology ETFs. This particular fund, before fees and expenses, seeks to match the performance of the S&P 500 Equal Weight Information Technology Index.
The S&P 500 Equal Weight Information Technology Index equally weights stocks in the information technology sector of the S&P 500 Index.
Cost & Other Expenses
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Annual operating expenses for RYT are 0.40%, which makes it one of the cheaper products in the space.
It's 12-month trailing dividend yield comes in at 0.63%.
Sector Exposure and Top Holdings
Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.
Representing 100% of the portfolio, the fund has heaviest allocation to the Information Technology sector.
Taking into account individual holdings, Citrix Systems Inc accounts for about 1.91% of the fund's total assets, followed by Nortonlifelock Inc and Jack Henry & Associates Inc (JKHY - Free Report) .
The top 10 holdings account for about 16.76% of total assets under management.
Performance and Risk
The ETF has lost about -22.42% and is down about -7.48% so far this year and in the past one year (as of 05/24/2022), respectively. RYT has traded between $243.91 and $327.55 during this last 52-week period.
RYT has a beta of 1.14 and standard deviation of 28.52% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 76 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco S&P 500 Equal Weight Technology ETF is an excellent option for investors seeking to outperform the Technology ETFs segment of the market. There are other ETFs in the space which investors could consider as well.
Technology Select Sector SPDR ETF (XLK - Free Report) tracks Technology Select Sector Index and the Vanguard Information Technology ETF (VGT - Free Report) tracks MSCI US Investable Market Information Technology 25/50 Index. Technology Select Sector SPDR ETF has $39.88 billion in assets, Vanguard Information Technology ETF has $42.30 billion. XLK has an expense ratio of 0.10% and VGT 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 Technology 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.