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Should You Invest in the Invesco S&P 500 Equal Weight Technology ETF (RYT)?

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Looking for broad exposure to the Technology - Broad segment of the equity market? You should consider the Invesco S&P 500 Equal Weight Technology ETF (RYT - Free Report) , 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. Technology - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 7, placing it in top 44%.

Index Details

The fund is sponsored by Invesco. It has amassed assets over $2.34 billion, making it one of the larger ETFs attempting to match the performance of the Technology - Broad segment of the equity market. RYT seeks to match the performance of the S&P 500 Equal Weight Information Technology Index before fees and expenses.

The S&P 500 Equal Weight Information Technology Index equally weights stocks in the information technology sector of the S&P 500 Index.

Costs

Expense ratios are an important factor in the return of an ETF and in the long term, cheaper funds can significantly outperform their more expensive counterparts, other things remaining 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 0.63%.

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.

This ETF has heaviest allocation in the Information Technology sector--about 100% of the portfolio.

Looking at individual holdings, Citrix Systems Inc (CTXS - Free Report) accounts for about 1.91% of total assets, followed by Nortonlifelock Inc (NLOK - Free Report) and Jack Henry & Associates Inc (JKHY - Free Report) .

The top 10 holdings account for about 16.76% of total assets under management.

Performance and Risk

The ETF has lost about -22.80% so far this year and is down about -7.03% in the last one year (as of 05/17/2022). In that past 52-week period, it has traded between $243.91 and $327.55.

The ETF has a beta of 1.14 and standard deviation of 28.43% for the trailing three-year period, making it a medium risk choice in the space. With about 76 holdings, it effectively diversifies company-specific risk.

Alternatives

Invesco S&P 500 Equal Weight Technology ETF holds a Zacks ETF Rank of 1 (Strong Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, RYT is an outstanding option for investors seeking exposure to the Technology ETFs segment of the market. There are other additional ETFs in the space that investors could consider as well.

Technology Select Sector SPDR ETF (XLK - Free Report) tracks Technology Select Sector Index and the Vanguard Information Technology ETF (VGT - Free Report) tracks MSCI US Investable Market Information Technology 25/50 Index. Technology Select Sector SPDR ETF has $40.20 billion in assets, Vanguard Information Technology ETF has $42.45 billion. XLK has an expense ratio of 0.10% and VGT charges 0.10%.

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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