Looking for broad exposure to the Financials - Broad segment of the equity market? You should consider the Invesco S&P 500 Equal Weight Financials ETF (
RYF Quick Quote RYF - Free Report) , a passively managed exchange traded fund launched on 11/01/2006.
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.
Investor-friendly, sector ETFs provide many options to gain low risk and diversified exposure to a broad group of companies in particular sectors. Financials - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 5, placing it in top 31%.
The fund is sponsored by Invesco. It has amassed assets over $396.51 million, making it one of the average sized ETFs attempting to match the performance of the Financials - Broad segment of the equity market. RYF seeks to match the performance of the S&P 500 Equal Weight Financials Index before fees and expenses.
The S&P 500 Equal Weight Financials Index is an unmanaged equal weighted version of the S&P 500 Financials Index that consists of the common stocks of the following industries: banks, diversified financials, brokerage, asset manage-ment insurance and real estate, including investment trusts that comprise the Financials sector of the S&P 500 Index.
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
Annual operating expenses for this ETF are 0.40%, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.57%.
Sector Exposure and Top Holdings
ETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Financials sector--about 100% of the portfolio.
Looking at individual holdings, Msci Inc (
MSCI Quick Quote MSCI - Free Report) accounts for about 1.82% of total assets, followed by Moody's Corp ( MCO Quick Quote MCO - Free Report) and Marketaxess Holdings Inc ( MKTX Quick Quote MKTX - Free Report) .
The top 10 holdings account for about 16.81% of total assets under management.
Performance and Risk
The ETF has gained about 31.07% and is up about 58.20% so far this year and in the past one year (as of 08/10/2021), respectively. RYF has traded between $36.50 and $62.70 during this last 52-week period.
The ETF has a beta of 1.23 and standard deviation of 30.92% for the trailing three-year period, making it a medium risk choice in the space. With about 67 holdings, it effectively diversifies company-specific risk.
Invesco S&P 500 Equal Weight Financials ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, RYF is an outstanding option for investors seeking exposure to the Financials ETFs segment of the market. There are other additional ETFs in the space that investors could consider as well.
Vanguard Financials ETF (
VFH Quick Quote VFH - Free Report) tracks MSCI US Investable Market Financials 25/50 Index and the Financial Select Sector SPDR ETF ( XLF Quick Quote XLF - Free Report) tracks Financial Select Sector Index. Vanguard Financials ETF has $11.15 billion in assets, Financial Select Sector SPDR ETF has $40.07 billion. VFH has an expense ratio of 0.10% and XLF charges 0.12%. Bottom Line
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Zacks ETF Center.