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Is Invesco S&P 500 Equal Weight Health Care ETF (RYH) a Strong ETF Right Now?
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The Invesco S&P 500 Equal Weight Health Care ETF made its debut on 11/01/2006, and is a smart beta exchange traded fund that provides broad exposure to the Health Care ETFs category of the market.
What Are Smart Beta ETFs?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.
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.
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.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
RYH is managed by Invesco, and this fund has amassed over $934.04 million, which makes it one of the larger ETFs in the Health Care ETFs. This particular fund seeks to match the performance of the S&P 500 Equal Weight Health Care Index before fees and expenses.
The S&P 500 Equal Weight Health Care Index equally weights stocks in the health care sector of the S&P 500 Index.
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 on par with most peer products in the space, this ETF has annual operating expenses of 0.40%.
It's 12-month trailing dividend yield comes in at 0.55%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
For RYH, it has heaviest allocation in the Healthcare sector --about 100% of the portfolio.
Looking at individual holdings, Anthem Inc accounts for about 1.93% of total assets, followed by Merck & Co Inc (MRK - Free Report) and Centene Corp (CNC - Free Report) .
Its top 10 holdings account for approximately 18.11% of RYH's total assets under management.
Performance and Risk
The ETF has lost about -7.66% so far this year and is up roughly 13.51% in the last one year (as of 03/10/2022). In the past 52-week period, it has traded between $262.26 and $321.86.
RYH has a beta of 0.89 and standard deviation of 21.37% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 65 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco S&P 500 Equal Weight Health Care ETF is a reasonable option for investors seeking to outperform the Health Care ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
Vanguard Health Care ETF (VHT - Free Report) tracks MSCI US Investable Market Health Care 25/50 Index and the Health Care Select Sector SPDR ETF (XLV - Free Report) tracks Health Care Select Sector Index. Vanguard Health Care ETF has $16.31 billion in assets, Health Care Select Sector SPDR ETF has $33.87 billion. VHT has an expense ratio of 0.10% and XLV 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 Health Care 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 Health Care ETF (RYH) a Strong ETF Right Now?
The Invesco S&P 500 Equal Weight Health Care ETF made its debut on 11/01/2006, and is a smart beta exchange traded fund that provides broad exposure to the Health Care ETFs category of the market.
What Are Smart Beta ETFs?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.
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.
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.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
RYH is managed by Invesco, and this fund has amassed over $934.04 million, which makes it one of the larger ETFs in the Health Care ETFs. This particular fund seeks to match the performance of the S&P 500 Equal Weight Health Care Index before fees and expenses.
The S&P 500 Equal Weight Health Care Index equally weights stocks in the health care sector of the S&P 500 Index.
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 on par with most peer products in the space, this ETF has annual operating expenses of 0.40%.
It's 12-month trailing dividend yield comes in at 0.55%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
For RYH, it has heaviest allocation in the Healthcare sector --about 100% of the portfolio.
Looking at individual holdings, Anthem Inc accounts for about 1.93% of total assets, followed by Merck & Co Inc (MRK - Free Report) and Centene Corp (CNC - Free Report) .
Its top 10 holdings account for approximately 18.11% of RYH's total assets under management.
Performance and Risk
The ETF has lost about -7.66% so far this year and is up roughly 13.51% in the last one year (as of 03/10/2022). In the past 52-week period, it has traded between $262.26 and $321.86.
RYH has a beta of 0.89 and standard deviation of 21.37% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 65 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco S&P 500 Equal Weight Health Care ETF is a reasonable option for investors seeking to outperform the Health Care ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
Vanguard Health Care ETF (VHT - Free Report) tracks MSCI US Investable Market Health Care 25/50 Index and the Health Care Select Sector SPDR ETF (XLV - Free Report) tracks Health Care Select Sector Index. Vanguard Health Care ETF has $16.31 billion in assets, Health Care Select Sector SPDR ETF has $33.87 billion. VHT has an expense ratio of 0.10% and XLV 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 Health Care 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.