Launched on 11/01/2006, the Invesco S&P 500 Equal Weight Health Care ETF (
RYH Quick Quote RYH - Free Report) is a passively managed exchange traded fund designed to provide a broad exposure to the Healthcare - Broad segment of the equity market.
While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.
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. Healthcare - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 5, placing it in top 31%.
The fund is sponsored by Invesco. It has amassed assets over $881.66 million, making it one of the larger ETFs attempting to match the performance of the Healthcare - Broad segment of the equity market. RYH 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.
When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.
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 0.71%.
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.
This ETF has heaviest allocation in the Healthcare sector--about 100% of the portfolio.
Looking at individual holdings, Organon & Co (
OGN Quick Quote OGN - Free Report) accounts for about 2.11% of total assets, followed by Cerner Corp and Bristol-Myers Squibb Co ( BMY Quick Quote BMY - Free Report) .
The top 10 holdings account for about 18.82% of total assets under management.
Performance and Risk
So far this year, RYH has lost about -13.30%, and is down about -7.50% in the last one year (as of 07/12/2022). During this past 52-week period, the fund has traded between $254.10 and $321.86.
The ETF has a beta of 0.88 and standard deviation of 22.29% 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 Health Care ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, RYH is a sufficient option for those seeking exposure to the Health Care ETFs area of the market. Investors might also want to consider some other ETF options in the space.
Vanguard Health Care ETF (
VHT Quick Quote VHT - Free Report) tracks MSCI US Investable Market Health Care 25/50 Index and the Health Care Select Sector SPDR ETF ( XLV Quick Quote XLV - Free Report) tracks Health Care Select Sector Index. Vanguard Health Care ETF has $15.78 billion in assets, Health Care Select Sector SPDR ETF has $38.36 billion. VHT has an expense ratio of 0.10% and XLV charges 0.10%. Bottom Line
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Zacks ETF Center.