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Should You Invest in the Invesco S&P 500 Equal Weight Energy ETF (RYE)?
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If you're interested in broad exposure to the Energy - Broad segment of the equity market, look no further than the Invesco S&P 500 Equal Weight Energy ETF , a passively managed exchange traded fund launched on 11/01/2006.
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are excellent vehicles for long term investors.
Sector ETFs are also funds of convenience, offering many ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. Energy - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 4, placing it in top 25%.
Index Details
The fund is sponsored by Invesco. It has amassed assets over $261.46 million, making it one of the average sized ETFs attempting to match the performance of the Energy - Broad segment of the equity market. RYE seeks to match the performance of the S&P 500 Equal Weight Energy Index before fees and expenses.
The S&P 500 Equal Weight Energy Index is an unmanaged equal weighted version of the S&P 500 Energy Index that consists of the common stocks of the following industries: oil and gas exploration, production, marketing, refining and/or transportation and energy equipment and services industries that comprise the Energy sector of the S&P 500 Index.
Costs
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
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 2.06%.
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 Energy sector--about 100% of the portfolio.
Looking at individual holdings, Marathon Oil Corp (MRO - Free Report) accounts for about 5.47% of total assets, followed by Diamondback Energy Inc (FANG - Free Report) and Devon Energy Corp (DVN - Free Report) .
The top 10 holdings account for about 50.34% of total assets under management.
Performance and Risk
The ETF has added about 53.48% and is up roughly 49.82% so far this year and in the past one year (as of 12/15/2021), respectively. RYE has traded between $30.39 and $51.87 during this last 52-week period.
The ETF has a beta of 2 and standard deviation of 46.68% for the trailing three-year period, making it a high risk choice in the space. With about 24 holdings, it has more concentrated exposure than peers.
Alternatives
Invesco S&P 500 Equal Weight Energy 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, RYE is a reasonable option for those seeking exposure to the Energy ETFs area of the market. Investors might also want to consider some other ETF options in the space.
Vanguard Energy ETF (VDE - Free Report) tracks MSCI US Investable Market Energy 25/50 Index and the Energy Select Sector SPDR ETF (XLE - Free Report) tracks Energy Select Sector Index. Vanguard Energy ETF has $5.67 billion in assets, Energy Select Sector SPDR ETF has $25.81 billion. VDE has an expense ratio of 0.10% and XLE 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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Should You Invest in the Invesco S&P 500 Equal Weight Energy ETF (RYE)?
If you're interested in broad exposure to the Energy - Broad segment of the equity market, look no further than the Invesco S&P 500 Equal Weight Energy ETF , a passively managed exchange traded fund launched on 11/01/2006.
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are excellent vehicles for long term investors.
Sector ETFs are also funds of convenience, offering many ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. Energy - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 4, placing it in top 25%.
Index Details
The fund is sponsored by Invesco. It has amassed assets over $261.46 million, making it one of the average sized ETFs attempting to match the performance of the Energy - Broad segment of the equity market. RYE seeks to match the performance of the S&P 500 Equal Weight Energy Index before fees and expenses.
The S&P 500 Equal Weight Energy Index is an unmanaged equal weighted version of the S&P 500 Energy Index that consists of the common stocks of the following industries: oil and gas exploration, production, marketing, refining and/or transportation and energy equipment and services industries that comprise the Energy sector of the S&P 500 Index.
Costs
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
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 2.06%.
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 Energy sector--about 100% of the portfolio.
Looking at individual holdings, Marathon Oil Corp (MRO - Free Report) accounts for about 5.47% of total assets, followed by Diamondback Energy Inc (FANG - Free Report) and Devon Energy Corp (DVN - Free Report) .
The top 10 holdings account for about 50.34% of total assets under management.
Performance and Risk
The ETF has added about 53.48% and is up roughly 49.82% so far this year and in the past one year (as of 12/15/2021), respectively. RYE has traded between $30.39 and $51.87 during this last 52-week period.
The ETF has a beta of 2 and standard deviation of 46.68% for the trailing three-year period, making it a high risk choice in the space. With about 24 holdings, it has more concentrated exposure than peers.
Alternatives
Invesco S&P 500 Equal Weight Energy 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, RYE is a reasonable option for those seeking exposure to the Energy ETFs area of the market. Investors might also want to consider some other ETF options in the space.
Vanguard Energy ETF (VDE - Free Report) tracks MSCI US Investable Market Energy 25/50 Index and the Energy Select Sector SPDR ETF (XLE - Free Report) tracks Energy Select Sector Index. Vanguard Energy ETF has $5.67 billion in assets, Energy Select Sector SPDR ETF has $25.81 billion. VDE has an expense ratio of 0.10% and XLE 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.