The Invesco S&P 500 Equal Weight Financials ETF (
RYF Quick Quote RYF - Free Report) was launched on 11/01/2006, and is a passively managed exchange traded fund designed to offer broad exposure to the Financials - Broad segment of the equity market.
An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also excellent vehicles for long term investors.
Additionally, sector ETFs offer convenient ways 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 2, placing it in top 13%.
The fund is sponsored by Invesco. It has amassed assets over $513.48 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 equally weights stocks in the financial sector of the S&P 500 Index.
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 on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.50%.
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.
This ETF has heaviest allocation in the Financials sector--about 100% of the portfolio.
Looking at individual holdings, Regions Financial Corp (
RF Quick Quote RF - Free Report) accounts for about 1.75% of total assets, followed by Svb Financial Group ( SIVB Quick Quote SIVB - Free Report) and Bank Of America Corp ( BAC Quick Quote BAC - Free Report) .
The top 10 holdings account for about 16.93% of total assets under management.
Performance and Risk
The ETF return is roughly 3.77% and is up about 35.64% so far this year and in the past one year (as of 01/11/2022), respectively. RYF has traded between $47.57 and $67.49 during this last 52-week period.
The ETF has a beta of 1.20 and standard deviation of 30.75% for the trailing three-year period, making it a medium risk choice in the space. With about 66 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 excellent 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 $12.10 billion in assets, Financial Select Sector SPDR ETF has $48.02 billion. VFH has an expense ratio of 0.10% and XLF charges 0.12%. Bottom Line
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