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Is Invesco S&P 500 Equal Weight Health Care ETF (RYH) a Strong ETF Right Now?
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Making its debut on 11/01/2006, smart beta exchange traded fund Invesco S&P 500 Equal Weight Health Care ETF provides investors broad exposure to the Health Care 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.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other 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
RYH is managed by Invesco, and this fund has amassed over $909.38 million, which makes it one of the larger ETFs in the Health Care ETFs. 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.
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.
Operating expenses on an annual basis are 0.40% for this ETF, which makes it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 0.72%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, 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 Healthcare sector.
Looking at individual holdings, Vertex Pharmaceuticals Inc (VRTX - Free Report) accounts for about 1.76% of total assets, followed by Moderna Inc (MRNA - Free Report) and Incyte Corp (INCY - Free Report) .
Its top 10 holdings account for approximately 16.79% of RYH's total assets under management.
Performance and Risk
The ETF has lost about -14.22% so far this year and is down about -12.14% in the last one year (as of 09/14/2022). In the past 52-week period, it has traded between $254.10 and $321.86.
RYH has a beta of 0.89 and standard deviation of 22.56% 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 $16.06 billion in assets, Health Care Select Sector SPDR ETF has $38.21 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?
Making its debut on 11/01/2006, smart beta exchange traded fund Invesco S&P 500 Equal Weight Health Care ETF provides investors broad exposure to the Health Care 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.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other 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
RYH is managed by Invesco, and this fund has amassed over $909.38 million, which makes it one of the larger ETFs in the Health Care ETFs. 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.
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.
Operating expenses on an annual basis are 0.40% for this ETF, which makes it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 0.72%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, 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 Healthcare sector.
Looking at individual holdings, Vertex Pharmaceuticals Inc (VRTX - Free Report) accounts for about 1.76% of total assets, followed by Moderna Inc (MRNA - Free Report) and Incyte Corp (INCY - Free Report) .
Its top 10 holdings account for approximately 16.79% of RYH's total assets under management.
Performance and Risk
The ETF has lost about -14.22% so far this year and is down about -12.14% in the last one year (as of 09/14/2022). In the past 52-week period, it has traded between $254.10 and $321.86.
RYH has a beta of 0.89 and standard deviation of 22.56% 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 $16.06 billion in assets, Health Care Select Sector SPDR ETF has $38.21 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.