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Is Invesco S&P 500 Equal Weight Financials ETF (RYF) a Strong ETF Right Now?
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The Invesco S&P 500 Equal Weight Financials ETF made its debut on 11/01/2006, and is a smart beta exchange traded fund that provides broad exposure to the Financials ETFs category of the market.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: 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.
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
RYF is managed by Invesco, and this fund has amassed over $428.84 million, which makes it one of the average sized ETFs in the Financials ETFs. This particular fund seeks to match the performance of the S&P 500 Equal Weight Financials Index before fees and expenses.
The S&P 500 Equal Weight Financials Index equally weights stocks in the financial 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 RYF, making it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 1.93%.
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.
RYF's heaviest allocation is in the Financials sector, which is about 100% of the portfolio.
Taking into account individual holdings, Factset Research Systems Inc (FDS - Free Report) accounts for about 1.61% of the fund's total assets, followed by Arthur J Gallagher & Co (AJG - Free Report) and Globe Life Inc (GL - Free Report) .
The top 10 holdings account for about 15.94% of total assets under management.
Performance and Risk
So far this year, RYF has lost about -11.91%, and is down about -6.89% in the last one year (as of 09/16/2022). During this past 52-week period, the fund has traded between $51.80 and $67.90.
The ETF has a beta of 1.10 and standard deviation of 32.06% for the trailing three-year period, making it a medium risk choice in the space. With about 67 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco S&P 500 Equal Weight Financials ETF is an excellent option for investors seeking to outperform the Financials ETFs segment of the market. There are other ETFs in the space which investors could consider as well.
Vanguard Financials ETF (VFH - Free Report) tracks MSCI US Investable Market Financials 25/50 Index and the Financial Select Sector SPDR ETF (XLF - Free Report) tracks Financial Select Sector Index. Vanguard Financials ETF has $8.83 billion in assets, Financial Select Sector SPDR ETF has $32.29 billion. VFH has an expense ratio of 0.10% and XLF 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 Financials 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 Financials ETF (RYF) a Strong ETF Right Now?
The Invesco S&P 500 Equal Weight Financials ETF made its debut on 11/01/2006, and is a smart beta exchange traded fund that provides broad exposure to the Financials ETFs category of the market.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: 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.
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
RYF is managed by Invesco, and this fund has amassed over $428.84 million, which makes it one of the average sized ETFs in the Financials ETFs. This particular fund seeks to match the performance of the S&P 500 Equal Weight Financials Index before fees and expenses.
The S&P 500 Equal Weight Financials Index equally weights stocks in the financial 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 RYF, making it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 1.93%.
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.
RYF's heaviest allocation is in the Financials sector, which is about 100% of the portfolio.
Taking into account individual holdings, Factset Research Systems Inc (FDS - Free Report) accounts for about 1.61% of the fund's total assets, followed by Arthur J Gallagher & Co (AJG - Free Report) and Globe Life Inc (GL - Free Report) .
The top 10 holdings account for about 15.94% of total assets under management.
Performance and Risk
So far this year, RYF has lost about -11.91%, and is down about -6.89% in the last one year (as of 09/16/2022). During this past 52-week period, the fund has traded between $51.80 and $67.90.
The ETF has a beta of 1.10 and standard deviation of 32.06% for the trailing three-year period, making it a medium risk choice in the space. With about 67 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco S&P 500 Equal Weight Financials ETF is an excellent option for investors seeking to outperform the Financials ETFs segment of the market. There are other ETFs in the space which investors could consider as well.
Vanguard Financials ETF (VFH - Free Report) tracks MSCI US Investable Market Financials 25/50 Index and the Financial Select Sector SPDR ETF (XLF - Free Report) tracks Financial Select Sector Index. Vanguard Financials ETF has $8.83 billion in assets, Financial Select Sector SPDR ETF has $32.29 billion. VFH has an expense ratio of 0.10% and XLF 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 Financials 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.