The Invesco Russell 1000 Equal Weight ETF (
EQAL Quick Quote 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?
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
EQAL is managed by Invesco, and this fund has amassed over $613.50 million, which makes it one of the larger ETFs in the Style Box - Large Cap Blend. This particular fund seeks to match the performance of the Russell 1000 Equal Weight Index before fees and expenses.
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.
Operating expenses on an annual basis are 0.20% for EQAL, making it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 1.60%.
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.
EQAL's heaviest allocation is in the Information Technology sector, which is about 14.30% of the portfolio. Its Industrials and Healthcare round out the top three.
Taking into account individual holdings, Roku Inc (
ROKU Quick Quote ROKU - Free Report) accounts for about 0.53% of the fund's total assets, followed by T-Mobile Us Inc ( TMUS Quick Quote TMUS - Free Report) and At&t Inc ( T Quick Quote T - Free Report) .
The top 10 holdings account for about 4.74% of total assets under management.
Performance and Risk
So far this year, EQAL has lost about -12.37%, and is down about -8.67% in the last one year (as of 09/16/2022). During this past 52-week period, the fund has traded between $38.38 and $48.05.
The ETF has a beta of 1.10 and standard deviation of 25.87% for the trailing three-year period, making it a medium risk choice in the space. With about 1011 holdings, it effectively diversifies company-specific risk.
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 Quick Quote IVV - Free Report) tracks S&P 500 Index and the SPDR S&P 500 ETF ( SPY Quick Quote SPY - Free Report) tracks S&P 500 Index. IShares Core S&P 500 ETF has $292.60 billion in assets, SPDR S&P 500 ETF has $355.04 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.
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.