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Is Invesco S&P 500 Equal Weight Technology ETF (RYT) a Strong ETF Right Now?
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The Invesco S&P 500 Equal Weight Technology ETF was launched on 11/01/2006, and is a smart beta exchange traded fund designed to offer broad exposure to the Technology ETFs category of the market.
What Are Smart Beta ETFs?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.
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.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
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
Managed by Invesco, RYT has amassed assets over $2.90 billion, making it one of the larger ETFs in the Technology ETFs. This particular fund, before fees and expenses, seeks to match the performance of the S&P 500 Equal Weight Information Technology Index.
The S&P 500 Equal Weight Information Technology Index is an unmanaged equal weighted version of the S&P 500 Information Technology Index that consists of common stocks of companies that comprise the Information Technology Sector of the S&P 500 Index, including companies that offer software & information technology services, manufacturers & distributors of technology hardware & equipment.
Cost & Other Expenses
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.
With one of the least expensive products in the space, this ETF has annual operating expenses of 0.40%.
RYT's 12-month trailing dividend yield is 0.66%.
Sector Exposure and Top Holdings
Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.
Representing 100% of the portfolio, the fund has heaviest allocation to the Information Technology sector.
When you look at individual holdings, Enphase Energy Inc (ENPH - Free Report) accounts for about 1.92% of the fund's total assets, followed by Arista Networks Inc (ANET - Free Report) and Salesforce.com Inc (CRM - Free Report) .
The top 10 holdings account for about 15.52% of total assets under management.
Performance and Risk
Year-to-date, the Invesco S&P 500 Equal Weight Technology ETF return is roughly 27.62% so far, and is up about 38.78% over the last 12 months (as of 11/16/2021). RYT has traded between $231.22 and $319.08 in this past 52-week period.
The ETF has a beta of 1.12 and standard deviation of 27.28% for the trailing three-year period, making it a medium risk choice in the space. With about 77 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco S&P 500 Equal Weight Technology ETF is an excellent option for investors seeking to outperform the Technology ETFs segment of the market. There are other ETFs in the space which investors could consider as well.
Technology Select Sector SPDR ETF (XLK - Free Report) tracks Technology Select Sector Index and the Vanguard Information Technology ETF (VGT - Free Report) tracks MSCI US Investable Market Information Technology 25/50 Index. Technology Select Sector SPDR ETF has $48.75 billion in assets, Vanguard Information Technology ETF has $55.25 billion. XLK has an expense ratio of 0.12% and VGT charges 0.10%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Technology ETFs.
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 S&P 500 Equal Weight Technology ETF (RYT) a Strong ETF Right Now?
The Invesco S&P 500 Equal Weight Technology ETF was launched on 11/01/2006, and is a smart beta exchange traded fund designed to offer broad exposure to the Technology ETFs category of the market.
What Are Smart Beta ETFs?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.
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.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
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
Managed by Invesco, RYT has amassed assets over $2.90 billion, making it one of the larger ETFs in the Technology ETFs. This particular fund, before fees and expenses, seeks to match the performance of the S&P 500 Equal Weight Information Technology Index.
The S&P 500 Equal Weight Information Technology Index is an unmanaged equal weighted version of the S&P 500 Information Technology Index that consists of common stocks of companies that comprise the Information Technology Sector of the S&P 500 Index, including companies that offer software & information technology services, manufacturers & distributors of technology hardware & equipment.
Cost & Other Expenses
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.
With one of the least expensive products in the space, this ETF has annual operating expenses of 0.40%.
RYT's 12-month trailing dividend yield is 0.66%.
Sector Exposure and Top Holdings
Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.
Representing 100% of the portfolio, the fund has heaviest allocation to the Information Technology sector.
When you look at individual holdings, Enphase Energy Inc (ENPH - Free Report) accounts for about 1.92% of the fund's total assets, followed by Arista Networks Inc (ANET - Free Report) and Salesforce.com Inc (CRM - Free Report) .
The top 10 holdings account for about 15.52% of total assets under management.
Performance and Risk
Year-to-date, the Invesco S&P 500 Equal Weight Technology ETF return is roughly 27.62% so far, and is up about 38.78% over the last 12 months (as of 11/16/2021). RYT has traded between $231.22 and $319.08 in this past 52-week period.
The ETF has a beta of 1.12 and standard deviation of 27.28% for the trailing three-year period, making it a medium risk choice in the space. With about 77 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco S&P 500 Equal Weight Technology ETF is an excellent option for investors seeking to outperform the Technology ETFs segment of the market. There are other ETFs in the space which investors could consider as well.
Technology Select Sector SPDR ETF (XLK - Free Report) tracks Technology Select Sector Index and the Vanguard Information Technology ETF (VGT - Free Report) tracks MSCI US Investable Market Information Technology 25/50 Index. Technology Select Sector SPDR ETF has $48.75 billion in assets, Vanguard Information Technology ETF has $55.25 billion. XLK has an expense ratio of 0.12% and VGT charges 0.10%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Technology ETFs.
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.