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Should You Invest in the Invesco S&P 500 Equal Weight Industrials ETF (RGI)?

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Looking for broad exposure to the Industrials - Broad segment of the equity market? You should consider the Invesco S&P 500 Equal Weight Industrials ETF (RGI - 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.

Additionally, sector ETFs offer convenient ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. Industrials - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 10, placing it in bottom 38%.

Index Details

The fund is sponsored by Invesco. It has amassed assets over $497.99 million, making it one of the average sized ETFs attempting to match the performance of the Industrials - Broad segment of the equity market. RGI seeks to match the performance of the S&P 500 Equal Weight Industrials Index before fees and expenses.

This index is an unmanaged equal weighted version of the S&P 500 Industrials Index that consists of the common stocks of the following industries: aerospace & defense, building products, construction & engineering, electrical equipment, conglomerates, machinery; commercial services & supplies, air freight & logistics, airlines, marine, road & rail transportation infrastructure.

Costs

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 0.40%, making it one of the cheaper products in the space.

It has a 12-month trailing dividend yield of 0.70%.

Sector Exposure and Top Holdings

Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.

This ETF has heaviest allocation in the Industrials sector--about 100% of the portfolio.

Looking at individual holdings, Norfolk Southern Corp (NSC - Free Report) accounts for about 1.58% of total assets, followed by Old Dominion Freight Line Inc (ODFL - Free Report) and Csx Corp (CSX - Free Report) .

The top 10 holdings account for about 15.18% of total assets under management.

Performance and Risk

Year-to-date, the Invesco S&P 500 Equal Weight Industrials ETF return is roughly 28.40% so far, and was up about 25.62% over the last 12 months (as of 12/13/2021). RGI has traded between $152.01 and $200.30 in this past 52-week period.

The ETF has a beta of 1.22 and standard deviation of 26.28% for the trailing three-year period, making it a medium risk choice in the space. With about 75 holdings, it effectively diversifies company-specific risk.

Alternatives

Invesco S&P 500 Equal Weight Industrials 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, RGI is an excellent option for investors seeking exposure to the Industrials ETFs segment of the market. There are other additional ETFs in the space that investors could consider as well.

Vanguard Industrials ETF (VIS - Free Report) tracks MSCI US Investable Market Industrials 25/50 Index and the Industrial Select Sector SPDR ETF (XLI - Free Report) tracks Industrial Select Sector Index. Vanguard Industrials ETF has $5.20 billion in assets, Industrial Select Sector SPDR ETF has $17.46 billion. VIS has an expense ratio of 0.10% and XLI charges 0.12%.

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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