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Is Invesco S&P 500 Equal Weight Industrials ETF (RGI) a Strong ETF Right Now?
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Making its debut on 11/01/2006, smart beta exchange traded fund Invesco S&P 500 Equal Weight Industrials ETF provides investors broad exposure to the Industrials ETFs category of the market.
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.
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.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.
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 $324.42 million, which makes it one of the average sized ETFs in the Industrials ETFs. RGI 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.
With on par with most peer products in the space, this ETF has annual operating expenses of 0.40%.
The fund has a 12-month trailing dividend yield of 1.03%.
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.
For RGI, it has heaviest allocation in the Industrials sector --about 100% of the portfolio.
Taking into account individual holdings, Boeing Co/the (BA - Free Report) accounts for about 1.66% of the fund's total assets, followed by Trane Technologies Plc (TT - Free Report) and Xylem Inc/ny (XYL - Free Report) .
The top 10 holdings account for about 14.2% of total assets under management.
Performance and Risk
Year-to-date, the Invesco S&P 500 Equal Weight Industrials ETF has lost about -14.71% so far, and is down about -9.12% over the last 12 months (as of 10/05/2022). RGI has traded between $154.92 and $200.30 in this past 52-week period.
The fund has a beta of 1.15 and standard deviation of 27.38% for the trailing three-year period, which makes RGI a medium risk choice in this particular space. With about 73 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 $3.31 billion in assets, Industrial Select Sector SPDR ETF has $11.88 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?
Making its debut on 11/01/2006, smart beta exchange traded fund Invesco S&P 500 Equal Weight Industrials ETF provides investors broad exposure to the Industrials ETFs category of the market.
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.
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.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.
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 $324.42 million, which makes it one of the average sized ETFs in the Industrials ETFs. RGI 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.
With on par with most peer products in the space, this ETF has annual operating expenses of 0.40%.
The fund has a 12-month trailing dividend yield of 1.03%.
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.
For RGI, it has heaviest allocation in the Industrials sector --about 100% of the portfolio.
Taking into account individual holdings, Boeing Co/the (BA - Free Report) accounts for about 1.66% of the fund's total assets, followed by Trane Technologies Plc (TT - Free Report) and Xylem Inc/ny (XYL - Free Report) .
The top 10 holdings account for about 14.2% of total assets under management.
Performance and Risk
Year-to-date, the Invesco S&P 500 Equal Weight Industrials ETF has lost about -14.71% so far, and is down about -9.12% over the last 12 months (as of 10/05/2022). RGI has traded between $154.92 and $200.30 in this past 52-week period.
The fund has a beta of 1.15 and standard deviation of 27.38% for the trailing three-year period, which makes RGI a medium risk choice in this particular space. With about 73 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 $3.31 billion in assets, Industrial Select Sector SPDR ETF has $11.88 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.