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Is Invesco S&P 500 Equal Weight Utilities ETF (RSPU) a Strong ETF Right Now?
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The Invesco S&P 500 Equal Weight Utilities ETF (RSPU - Free Report) made its debut on 11/01/2006, and is a smart beta exchange traded fund that provides broad exposure to the Utilities/Infrastructure ETFs category of the market.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
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.
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.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
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
Because the fund has amassed over $248.88 million, this makes it one of the average sized ETFs in the Utilities/Infrastructure ETFs. RSPU is managed by Invesco. This particular fund seeks to match the performance of the SP 500 EQUAL WEIGHT TELECM-UTILITY INDEX before fees and expenses.
The S&P 500 Equal Weight Telecommunication Services & Utilities Index equally weights stocks found in the utilities and telecommunication services sectors 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 RSPU are 0.40%, which makes it one of the cheaper products in the space.
RSPU's 12-month trailing dividend yield is 2.90%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, 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 Utilities sector.
Taking into account individual holdings, Constellation Energy Corp (CEG - Free Report) accounts for about 3.56% of the fund's total assets, followed by Aes Corp/the (AES - Free Report) and Nrg Energy Inc (NRG - Free Report) .
The top 10 holdings account for about 34.16% of total assets under management.
Performance and Risk
The ETF return is roughly 3.33% so far this year and it's up approximately 5.05% in the last one year (as of 03/28/2024). In the past 52-week period, it has traded between $48.19 and $58.52.
The fund has a beta of 0.60 and standard deviation of 17.74% for the trailing three-year period. With about 32 holdings, it has more concentrated exposure than peers.
Alternatives
Invesco S&P 500 Equal Weight Utilities ETF is not a suitable option for investors seeking to outperform the Utilities/Infrastructure ETFs segment of the market. Instead, there are other ETFs in the space which investors should consider.
Vanguard Utilities ETF (VPU - Free Report) tracks MSCI US Investable Market Utilities 25/50 Index and the Utilities Select Sector SPDR ETF (XLU - Free Report) tracks Utilities Select Sector Index. Vanguard Utilities ETF has $5.07 billion in assets, Utilities Select Sector SPDR ETF has $12.34 billion. VPU has an expense ratio of 0.10% and XLU 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 Utilities/Infrastructure 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 Utilities ETF (RSPU) a Strong ETF Right Now?
The Invesco S&P 500 Equal Weight Utilities ETF (RSPU - Free Report) made its debut on 11/01/2006, and is a smart beta exchange traded fund that provides broad exposure to the Utilities/Infrastructure ETFs category of the market.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
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.
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.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
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
Because the fund has amassed over $248.88 million, this makes it one of the average sized ETFs in the Utilities/Infrastructure ETFs. RSPU is managed by Invesco. This particular fund seeks to match the performance of the SP 500 EQUAL WEIGHT TELECM-UTILITY INDEX before fees and expenses.
The S&P 500 Equal Weight Telecommunication Services & Utilities Index equally weights stocks found in the utilities and telecommunication services sectors 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 RSPU are 0.40%, which makes it one of the cheaper products in the space.
RSPU's 12-month trailing dividend yield is 2.90%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, 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 Utilities sector.
Taking into account individual holdings, Constellation Energy Corp (CEG - Free Report) accounts for about 3.56% of the fund's total assets, followed by Aes Corp/the (AES - Free Report) and Nrg Energy Inc (NRG - Free Report) .
The top 10 holdings account for about 34.16% of total assets under management.
Performance and Risk
The ETF return is roughly 3.33% so far this year and it's up approximately 5.05% in the last one year (as of 03/28/2024). In the past 52-week period, it has traded between $48.19 and $58.52.
The fund has a beta of 0.60 and standard deviation of 17.74% for the trailing three-year period. With about 32 holdings, it has more concentrated exposure than peers.
Alternatives
Invesco S&P 500 Equal Weight Utilities ETF is not a suitable option for investors seeking to outperform the Utilities/Infrastructure ETFs segment of the market. Instead, there are other ETFs in the space which investors should consider.
Vanguard Utilities ETF (VPU - Free Report) tracks MSCI US Investable Market Utilities 25/50 Index and the Utilities Select Sector SPDR ETF (XLU - Free Report) tracks Utilities Select Sector Index. Vanguard Utilities ETF has $5.07 billion in assets, Utilities Select Sector SPDR ETF has $12.34 billion. VPU has an expense ratio of 0.10% and XLU 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 Utilities/Infrastructure 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.