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Is Invesco Russell 1000 Equal Weight ETF (EQAL) a Strong ETF Right Now?
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The Invesco Russell 1000 Equal Weight ETF (EQAL - Free Report) made its debut on 12/23/2014, and is a smart beta exchange traded fund that provides broad exposure to the Style Box - Large Cap Blend category of the market.
What Are Smart Beta ETFs?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.
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.
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.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
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
Because the fund has amassed over $612.50 million, this makes it one of the larger ETFs in the Style Box - Large Cap Blend. EQAL is managed by Invesco. Before fees and expenses, EQAL seeks to match the performance of the Russell 1000 Equal Weight Index.
The Russell 1000 Equal Weight Index is composed of securities in the Russell 1000 Index and is equally weighted across nine sector groups with each security within the sector receiving equal weight.
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 EQAL are 0.20%, which makes it one of the cheaper products in the space.
The fund has a 12-month trailing dividend yield of 1.40%.
Sector Exposure and Top Holdings
Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.
EQAL's heaviest allocation is in the Information Technology sector, which is about 14.10% of the portfolio. Its Industrials and Materials round out the top three.
When you look at individual holdings, Coterra Energy Inc (CTRA - Free Report) accounts for about 0.56% of the fund's total assets, followed by Viasat Inc (VSAT - Free Report) and Arista Networks Inc (ANET - Free Report) .
Its top 10 holdings account for approximately 4.69% of EQAL's total assets under management.
Performance and Risk
The ETF has lost about -6.08% so far this year and is up about 5.57% in the last one year (as of 03/11/2022). In the past 52-week period, it has traded between $41.85 and $48.05.
The ETF has a beta of 1.14 and standard deviation of 24.55% for the trailing three-year period, making it a medium risk choice in the space. With about 1013 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco Russell 1000 Equal Weight ETF is a reasonable option for investors seeking to outperform the Style Box - Large Cap Blend segment of the market. However, there are other ETFs in the space which investors could consider.
IShares Core S&P 500 ETF (IVV - Free Report) tracks S&P 500 Index and the SPDR S&P 500 ETF (SPY - Free Report) tracks S&P 500 Index. IShares Core S&P 500 ETF has $309.41 billion in assets, SPDR S&P 500 ETF has $391.66 billion. IVV has an expense ratio of 0.03% and SPY charges 0.09%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - Large Cap Blend.
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 Russell 1000 Equal Weight ETF (EQAL) a Strong ETF Right Now?
The Invesco Russell 1000 Equal Weight ETF (EQAL - Free Report) made its debut on 12/23/2014, and is a smart beta exchange traded fund that provides broad exposure to the Style Box - Large Cap Blend category of the market.
What Are Smart Beta ETFs?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.
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.
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.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
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
Because the fund has amassed over $612.50 million, this makes it one of the larger ETFs in the Style Box - Large Cap Blend. EQAL is managed by Invesco. Before fees and expenses, EQAL seeks to match the performance of the Russell 1000 Equal Weight Index.
The Russell 1000 Equal Weight Index is composed of securities in the Russell 1000 Index and is equally weighted across nine sector groups with each security within the sector receiving equal weight.
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 EQAL are 0.20%, which makes it one of the cheaper products in the space.
The fund has a 12-month trailing dividend yield of 1.40%.
Sector Exposure and Top Holdings
Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.
EQAL's heaviest allocation is in the Information Technology sector, which is about 14.10% of the portfolio. Its Industrials and Materials round out the top three.
When you look at individual holdings, Coterra Energy Inc (CTRA - Free Report) accounts for about 0.56% of the fund's total assets, followed by Viasat Inc (VSAT - Free Report) and Arista Networks Inc (ANET - Free Report) .
Its top 10 holdings account for approximately 4.69% of EQAL's total assets under management.
Performance and Risk
The ETF has lost about -6.08% so far this year and is up about 5.57% in the last one year (as of 03/11/2022). In the past 52-week period, it has traded between $41.85 and $48.05.
The ETF has a beta of 1.14 and standard deviation of 24.55% for the trailing three-year period, making it a medium risk choice in the space. With about 1013 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco Russell 1000 Equal Weight ETF is a reasonable option for investors seeking to outperform the Style Box - Large Cap Blend segment of the market. However, there are other ETFs in the space which investors could consider.
IShares Core S&P 500 ETF (IVV - Free Report) tracks S&P 500 Index and the SPDR S&P 500 ETF (SPY - Free Report) tracks S&P 500 Index. IShares Core S&P 500 ETF has $309.41 billion in assets, SPDR S&P 500 ETF has $391.66 billion. IVV has an expense ratio of 0.03% and SPY charges 0.09%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - Large Cap Blend.
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.