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Is Invesco S&P 500 Equal Weight Industrials ETF (RGI) a Strong ETF Right Now?
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The Invesco S&P 500 Equal Weight Industrials ETF made its debut on 11/01/2006, and is a smart beta exchange traded fund that provides broad exposure to the Industrials ETFs category of the market.
What Are Smart Beta ETFs?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
Managed by Invesco, RGI has amassed assets over $484.29 million, making it one of the average sized ETFs in the Industrials ETFs. RGI seeks to match the performance of the S&P 500 Equal Weight Industrials Index before fees and expenses.
The S&P 500 Equal Weight Industrials Index equally weights stocks in the industrials sector of the S&P 500 Index.
Cost & Other Expenses
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
Annual operating expenses for RGI are 0.40%, which makes it one of the cheaper products in the space.
It has a 12-month trailing dividend yield of 0.74%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
Representing 100% of the portfolio, the fund has heaviest allocation to the Industrials sector.
When you look at individual holdings, Norfolk Southern Corp (NSC - Free Report) accounts for about 1.58% of the fund's total assets, followed by Old Dominion Freight Line Inc (ODFL - Free Report) and Csx Corp (CSX - Free Report) .
Its top 10 holdings account for approximately 15.18% of RGI's total assets under management.
Performance and Risk
The ETF has lost about -4.06% and was up about 18.47% so far this year and in the past one year (as of 01/25/2022), respectively. RGI has traded between $152.01 and $200.30 during this last 52-week period.
The fund has a beta of 1.22 and standard deviation of 25.98% for the trailing three-year period, which makes RGI a medium risk choice in this particular space. With about 75 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco S&P 500 Equal Weight Industrials ETF is a reasonable option for investors seeking to outperform the Industrials ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
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 $4.96 billion in assets, Industrial Select Sector SPDR ETF has $17.52 billion. VIS has an expense ratio of 0.10% and XLI charges 0.12%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Industrials 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 Industrials ETF (RGI) a Strong ETF Right Now?
The Invesco S&P 500 Equal Weight Industrials ETF made its debut on 11/01/2006, and is a smart beta exchange traded fund that provides broad exposure to the Industrials ETFs category of the market.
What Are Smart Beta ETFs?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
Managed by Invesco, RGI has amassed assets over $484.29 million, making it one of the average sized ETFs in the Industrials ETFs. RGI seeks to match the performance of the S&P 500 Equal Weight Industrials Index before fees and expenses.
The S&P 500 Equal Weight Industrials Index equally weights stocks in the industrials sector of the S&P 500 Index.
Cost & Other Expenses
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
Annual operating expenses for RGI are 0.40%, which makes it one of the cheaper products in the space.
It has a 12-month trailing dividend yield of 0.74%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
Representing 100% of the portfolio, the fund has heaviest allocation to the Industrials sector.
When you look at individual holdings, Norfolk Southern Corp (NSC - Free Report) accounts for about 1.58% of the fund's total assets, followed by Old Dominion Freight Line Inc (ODFL - Free Report) and Csx Corp (CSX - Free Report) .
Its top 10 holdings account for approximately 15.18% of RGI's total assets under management.
Performance and Risk
The ETF has lost about -4.06% and was up about 18.47% so far this year and in the past one year (as of 01/25/2022), respectively. RGI has traded between $152.01 and $200.30 during this last 52-week period.
The fund has a beta of 1.22 and standard deviation of 25.98% for the trailing three-year period, which makes RGI a medium risk choice in this particular space. With about 75 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco S&P 500 Equal Weight Industrials ETF is a reasonable option for investors seeking to outperform the Industrials ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
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 $4.96 billion in assets, Industrial Select Sector SPDR ETF has $17.52 billion. VIS has an expense ratio of 0.10% and XLI charges 0.12%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Industrials 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.