The Invesco Russell 1000 Equal Weight ETF (EQAL) was launched on 12/23/2014, and is a passively managed exchange traded fund designed to offer broad exposure to the Large Cap Blend segment of the US equity market.
The fund is sponsored by Invesco. It has amassed assets over $528.50 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. Overall, they are usually a stable option, with less risk and more sure-fire cash flows than mid and small cap companies.
Blend ETFs usually hold a mix of growth and value stocks as well as stocks that exhibit both value and growth characteristics.
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 counterparts, other things remaining the same.
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 1.72%.
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 Industrials sector--about 14.50% of the portfolio. Information Technology and Healthcare round out the top three.
Looking at individual holdings, Roku Inc (ROKU) accounts for about 0.50% of total assets, followed by Ubiquiti Inc (UI) and Lumentum Holdings Inc (LITE).
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 added about 12.38% so far this year and is up about 17.60% in the last one year (as of 12/04/2020). In the past 52-week period, it has traded between $20.58 and $37.96.
The ETF has a beta of 1.21 and standard deviation of 24.50% 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 S&P 500 ETF (IVV) and the SPDR S&P 500 ETF (SPY) track a similar index. While iShares Core S&P 500 ETF has $238.59 billion in assets, SPDR S&P 500 ETF has $328.47 billion. IVV has an expense ratio of 0.03% and SPY charges 0.09%.
While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.
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.