Looking for broad exposure to the Large Cap Blend segment of the US equity market? You should consider the Invesco Russell 1000 Equal Weight ETF (
EQAL Quick Quote EQAL - Free Report) , a passively managed exchange traded fund launched on 12/23/2014.
The fund is sponsored by Invesco. It has amassed assets over $467.58 million, making it one of the average sized ETFs attempting to match the Large Cap Blend segment of the US equity market.
Why Large Cap Blend
Companies that find themselves in the large cap category typically have a market capitalization above $10 billion. Considered a more stable option, large cap companies boast more predictable cash flows and are less volatile than their mid and small cap counterparts.
Blend ETFs usually hold a mix of growth and value stocks as well as stocks that exhibit both value and growth characteristics.
When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.
Annual operating expenses for this ETF are 0.20%, making it one of the cheaper products in the space.
It has a 12-month trailing dividend yield of 1.93%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Information Technology sector--about 14.20% of the portfolio. Industrials and Healthcare round out the top three.
Looking at individual holdings, Roku Inc (
ROKU Quick Quote ROKU - Free Report) accounts for about 0.50% of total assets, followed by Ubiquiti Inc ( UI Quick Quote UI - Free Report) and Lumentum Holdings Inc ( LITE Quick Quote LITE - Free Report) .
The top 10 holdings account for about 4.12% of total assets under management.
Performance and Risk
EQAL seeks to match the performance of the Russell 1000 Equal Weight Index before fees and expenses. 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.
The ETF has gained about 0.15% so far this year and is up about 8.45% in the last one year (as of 10/21/2020). In the past 52-week period, it has traded between $20.58 and $34.82.
The ETF has a beta of 1.18 and standard deviation of 24.09% for the trailing three-year period, making it a medium risk choice in the space. With about 1001 holdings, it effectively diversifies company-specific risk.
Invesco Russell 1000 Equal Weight ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, EQAL is a sufficient option for those seeking exposure to the Style Box - Large Cap Blend area of the market. Investors might also want to consider some other ETF options in the space.
The iShares Core SP 500 ETF (
IVV Quick Quote IVV - Free Report) and the SPDR SP 500 ETF ( SPY Quick Quote SPY - Free Report) track a similar index. While iShares Core SP 500 ETF has $220.65 billion in assets, SPDR SP 500 ETF has $297.03 billion. IVV has an expense ratio of 0.03% and SPY charges 0.09%. Bottom-Line
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are excellent vehicles for long term investors.
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.