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Is Invesco Russell 1000 Equal Weight ETF (EQAL) a Strong ETF Right Now?
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The Invesco Russell 1000 Equal Weight ETF (EQAL - Free Report) made its debut on 12/23/2014, and is a smart beta exchange traded fund that provides broad exposure to the Style Box - Large Cap Blend 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.
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.
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.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
EQAL is managed by Invesco, and this fund has amassed over $599.54 million, which makes it one of the average sized ETFs in the Style Box - Large Cap Blend. Before fees and expenses, EQAL 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
Expense ratios are an important factor in the return of an ETF and in the long-term, cheaper funds can significantly outperform their more expensive cousins, other things remaining the same.
Operating expenses on an annual basis are 0.20% for this ETF, which makes it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.80%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
Representing 13% of the portfolio, the fund has heaviest allocation to the Information Technology sector; Industrials and Financials round out the top three.
When you look at individual holdings, Lumentum Holdings Inc (LITE - Free Report) accounts for about 0.52% of the fund's total assets, followed by Ubiquiti Inc (UI - Free Report) and Viasat Inc (VSAT - Free Report) .
EQAL's top 10 holdings account for about 4.91% of its total assets under management.
Performance and Risk
Year-to-date, the Invesco Russell 1000 Equal Weight ETF has added roughly 3.42% so far, and was up about 12.53% over the last 12 months (as of 04/03/2024). EQAL has traded between $37.43 and $46.19 in this past 52-week period.
The ETF has a beta of 1.11 and standard deviation of 18.14% for the trailing three-year period, making it a medium risk choice in the space. With about 998 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 $450.65 billion in assets, SPDR S&P 500 ETF has $531.41 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.
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Is Invesco Russell 1000 Equal Weight ETF (EQAL) a Strong ETF Right Now?
The Invesco Russell 1000 Equal Weight ETF (EQAL - Free Report) made its debut on 12/23/2014, and is a smart beta exchange traded fund that provides broad exposure to the Style Box - Large Cap Blend 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.
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.
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.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
EQAL is managed by Invesco, and this fund has amassed over $599.54 million, which makes it one of the average sized ETFs in the Style Box - Large Cap Blend. Before fees and expenses, EQAL 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
Expense ratios are an important factor in the return of an ETF and in the long-term, cheaper funds can significantly outperform their more expensive cousins, other things remaining the same.
Operating expenses on an annual basis are 0.20% for this ETF, which makes it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.80%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
Representing 13% of the portfolio, the fund has heaviest allocation to the Information Technology sector; Industrials and Financials round out the top three.
When you look at individual holdings, Lumentum Holdings Inc (LITE - Free Report) accounts for about 0.52% of the fund's total assets, followed by Ubiquiti Inc (UI - Free Report) and Viasat Inc (VSAT - Free Report) .
EQAL's top 10 holdings account for about 4.91% of its total assets under management.
Performance and Risk
Year-to-date, the Invesco Russell 1000 Equal Weight ETF has added roughly 3.42% so far, and was up about 12.53% over the last 12 months (as of 04/03/2024). EQAL has traded between $37.43 and $46.19 in this past 52-week period.
The ETF has a beta of 1.11 and standard deviation of 18.14% for the trailing three-year period, making it a medium risk choice in the space. With about 998 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 $450.65 billion in assets, SPDR S&P 500 ETF has $531.41 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.