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Should ALPS Equal Sector Weight ETF (EQL) Be on Your Investing Radar?
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Designed to provide broad exposure to the Large Cap Blend segment of the US equity market, the ALPS Equal Sector Weight ETF (EQL - Free Report) is a passively managed exchange traded fund launched on 07/07/2009.
The fund is sponsored by Alps. It has amassed assets over $210.71 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 fall in the large cap category tend to 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 are aptly named, since they tend to hold a mix of growth and value stocks, as well as show characteristics of both kinds of equities.
Costs
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are the same.
Annual operating expenses for this ETF are 0.28%, putting it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.70%.
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.
Looking at individual holdings, Utilities Select Sector Spdr Fund (XLU - Free Report) accounts for about 9.23% of total assets, followed by Consumer Staples Select Sector Spdr Fund (XLP - Free Report) and Technology Select Sector Spdr Fund (XLK - Free Report) .
The top 10 holdings account for about 91% of total assets under management.
Performance and Risk
EQL seeks to match the performance of the NYSE Select Sector Equal Weight Index before fees and expenses. The NYSE Select Sector Equal Weight Index comprises of all active Select Sector SPDR ETFs in an equal weighted portfolio. These sector includes Consumer Discretionary, Consumer Staples, Materials, Energy, Technology, Utilities, Financial, Industrial, Health Care & Real Estate.
The ETF return is roughly 18.58% so far this year and was up about 38.25% in the last one year (as of 06/03/2021). In the past 52-week period, it has traded between $70.57 and $100.34.
The ETF has a beta of 0.97 and standard deviation of 22.12% for the trailing three-year period, making it a medium risk choice in the space. With about 12 holdings, it has more concentrated exposure than peers.
Alternatives
ALPS Equal Sector 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, EQL 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 - Free Report) and the SPDR S&P 500 ETF (SPY - Free Report) track a similar index. While iShares Core S&P 500 ETF has $280.26 billion in assets, SPDR S&P 500 ETF has $362.41 billion. IVV has an expense ratio of 0.03% and SPY charges 0.09%.
Bottom-Line
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.
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Should ALPS Equal Sector Weight ETF (EQL) Be on Your Investing Radar?
Designed to provide broad exposure to the Large Cap Blend segment of the US equity market, the ALPS Equal Sector Weight ETF (EQL - Free Report) is a passively managed exchange traded fund launched on 07/07/2009.
The fund is sponsored by Alps. It has amassed assets over $210.71 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 fall in the large cap category tend to 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 are aptly named, since they tend to hold a mix of growth and value stocks, as well as show characteristics of both kinds of equities.
Costs
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are the same.
Annual operating expenses for this ETF are 0.28%, putting it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.70%.
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.
Looking at individual holdings, Utilities Select Sector Spdr Fund (XLU - Free Report) accounts for about 9.23% of total assets, followed by Consumer Staples Select Sector Spdr Fund (XLP - Free Report) and Technology Select Sector Spdr Fund (XLK - Free Report) .
The top 10 holdings account for about 91% of total assets under management.
Performance and Risk
EQL seeks to match the performance of the NYSE Select Sector Equal Weight Index before fees and expenses. The NYSE Select Sector Equal Weight Index comprises of all active Select Sector SPDR ETFs in an equal weighted portfolio. These sector includes Consumer Discretionary, Consumer Staples, Materials, Energy, Technology, Utilities, Financial, Industrial, Health Care & Real Estate.
The ETF return is roughly 18.58% so far this year and was up about 38.25% in the last one year (as of 06/03/2021). In the past 52-week period, it has traded between $70.57 and $100.34.
The ETF has a beta of 0.97 and standard deviation of 22.12% for the trailing three-year period, making it a medium risk choice in the space. With about 12 holdings, it has more concentrated exposure than peers.
Alternatives
ALPS Equal Sector 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, EQL 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 - Free Report) and the SPDR S&P 500 ETF (SPY - Free Report) track a similar index. While iShares Core S&P 500 ETF has $280.26 billion in assets, SPDR S&P 500 ETF has $362.41 billion. IVV has an expense ratio of 0.03% and SPY charges 0.09%.
Bottom-Line
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.