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Is Invesco S&P 500 Equal Weight Technology ETF (RYT) 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 Technology ETF provides investors broad exposure to the Technology ETFs category of the market.
What Are Smart Beta ETFs?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
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.
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.
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
Because the fund has amassed over $2.59 billion, this makes it one of the larger ETFs in the Technology ETFs. RYT is managed by Invesco. RYT, 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
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.
Annual operating expenses for this ETF are 0.40%, making it one of the cheaper products in the space.
It's 12-month trailing dividend yield comes in at 0.65%.
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.
For RYT, it has heaviest allocation in the Information Technology sector --about 86.80% of the portfolio --while Financials and Industrials round out the top three.
Looking at individual holdings, First Solar Inc (FSLR - Free Report) accounts for about 1.42% of total assets, followed by Verisign Inc (VRSN - Free Report) and Ptc Inc (PTC - Free Report) .
The top 10 holdings account for about 12.37% of total assets under management.
Performance and Risk
So far this year, RYT return is roughly 13.27%, and is down about -3.91% in the last one year (as of 04/04/2023). During this past 52-week period, the fund has traded between $220.06 and $285.42.
The ETF has a beta of 1.18 and standard deviation of 25.96% for the trailing three-year period, making it a medium risk choice in the space. With about 78 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 $43.63 billion in assets, Vanguard Information Technology ETF has $46.69 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?
Making its debut on 11/01/2006, smart beta exchange traded fund Invesco S&P 500 Equal Weight Technology ETF provides investors broad exposure to the Technology ETFs category of the market.
What Are Smart Beta ETFs?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
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.
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.
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
Because the fund has amassed over $2.59 billion, this makes it one of the larger ETFs in the Technology ETFs. RYT is managed by Invesco. RYT, 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
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.
Annual operating expenses for this ETF are 0.40%, making it one of the cheaper products in the space.
It's 12-month trailing dividend yield comes in at 0.65%.
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.
For RYT, it has heaviest allocation in the Information Technology sector --about 86.80% of the portfolio --while Financials and Industrials round out the top three.
Looking at individual holdings, First Solar Inc (FSLR - Free Report) accounts for about 1.42% of total assets, followed by Verisign Inc (VRSN - Free Report) and Ptc Inc (PTC - Free Report) .
The top 10 holdings account for about 12.37% of total assets under management.
Performance and Risk
So far this year, RYT return is roughly 13.27%, and is down about -3.91% in the last one year (as of 04/04/2023). During this past 52-week period, the fund has traded between $220.06 and $285.42.
The ETF has a beta of 1.18 and standard deviation of 25.96% for the trailing three-year period, making it a medium risk choice in the space. With about 78 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 $43.63 billion in assets, Vanguard Information Technology ETF has $46.69 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.