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Is Invesco S&P 500 Equal Weight Industrials ETF (RGI) a Strong ETF Right Now?
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The Invesco S&P 500 Equal Weight Industrials ETF made its debut on 11/01/2006, and is a smart beta exchange traded fund that provides broad exposure to the Industrials 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.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
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
Because the fund has amassed over $331.91 million, this makes it one of the average sized ETFs in the Industrials ETFs. RGI is managed by Invesco. This particular fund, before fees and expenses, seeks to match the performance of the S&P 500 Equal Weight Industrials Index.
The S&P 500 Equal Weight Industrials Index equally weights stocks in the industrials sector of the S&P 500 Index.
Cost & Other Expenses
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 cousins, other things remaining the same.
With on par with most peer products in the space, this ETF has annual operating expenses of 0.40%.
The fund has a 12-month trailing dividend yield of 0.91%.
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.
For RGI, it has heaviest allocation in the Industrials sector --about 100% of the portfolio.
Looking at individual holdings, Boeing Co/the (BA - Free Report) accounts for about 1.66% of total assets, followed by Trane Technologies Plc (TT - Free Report) and Xylem Inc/ny (XYL - Free Report) .
Its top 10 holdings account for approximately 14.2% of RGI's total assets under management.
Performance and Risk
The ETF has lost about -3.46% and is down about -0.87% so far this year and in the past one year (as of 12/05/2022), respectively. RGI has traded between $154.92 and $199.44 during this last 52-week period.
The fund has a beta of 1.17 and standard deviation of 27.80% for the trailing three-year period, which makes RGI a medium risk choice in this particular space. With about 73 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco S&P 500 Equal Weight Industrials ETF is a reasonable option for investors seeking to outperform the Industrials ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
Vanguard Industrials ETF (VIS - Free Report) tracks MSCI US Investable Market Industrials 25/50 Index and the Industrial Select Sector SPDR ETF (XLI - Free Report) tracks Industrial Select Sector Index. Vanguard Industrials ETF has $3.72 billion in assets, Industrial Select Sector SPDR ETF has $14.70 billion. VIS has an expense ratio of 0.10% and XLI 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 Industrials 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 Industrials ETF (RGI) a Strong ETF Right Now?
The Invesco S&P 500 Equal Weight Industrials ETF made its debut on 11/01/2006, and is a smart beta exchange traded fund that provides broad exposure to the Industrials 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.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
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
Because the fund has amassed over $331.91 million, this makes it one of the average sized ETFs in the Industrials ETFs. RGI is managed by Invesco. This particular fund, before fees and expenses, seeks to match the performance of the S&P 500 Equal Weight Industrials Index.
The S&P 500 Equal Weight Industrials Index equally weights stocks in the industrials sector of the S&P 500 Index.
Cost & Other Expenses
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 cousins, other things remaining the same.
With on par with most peer products in the space, this ETF has annual operating expenses of 0.40%.
The fund has a 12-month trailing dividend yield of 0.91%.
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.
For RGI, it has heaviest allocation in the Industrials sector --about 100% of the portfolio.
Looking at individual holdings, Boeing Co/the (BA - Free Report) accounts for about 1.66% of total assets, followed by Trane Technologies Plc (TT - Free Report) and Xylem Inc/ny (XYL - Free Report) .
Its top 10 holdings account for approximately 14.2% of RGI's total assets under management.
Performance and Risk
The ETF has lost about -3.46% and is down about -0.87% so far this year and in the past one year (as of 12/05/2022), respectively. RGI has traded between $154.92 and $199.44 during this last 52-week period.
The fund has a beta of 1.17 and standard deviation of 27.80% for the trailing three-year period, which makes RGI a medium risk choice in this particular space. With about 73 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco S&P 500 Equal Weight Industrials ETF is a reasonable option for investors seeking to outperform the Industrials ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
Vanguard Industrials ETF (VIS - Free Report) tracks MSCI US Investable Market Industrials 25/50 Index and the Industrial Select Sector SPDR ETF (XLI - Free Report) tracks Industrial Select Sector Index. Vanguard Industrials ETF has $3.72 billion in assets, Industrial Select Sector SPDR ETF has $14.70 billion. VIS has an expense ratio of 0.10% and XLI 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 Industrials 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.