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Is Invesco Russell 1000 Equal Weight ETF (EQAL) a Strong ETF Right Now?
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Launched on 12/23/2014, the Invesco Russell 1000 Equal Weight ETF (EQAL - Free Report) is a smart beta exchange traded fund offering 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.
A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.
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.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
EQAL is managed by Invesco, and this fund has amassed over $633.80 million, which makes it one of the larger ETFs in the Style Box - Large Cap Blend. This particular fund, before fees and expenses, seeks to match the performance of the Russell 1000 Equal Weight Index.
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
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.
Annual operating expenses for this ETF are 0.20%, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.84%.
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 13.60% of the portfolio. Its Industrials and Materials round out the top three.
Taking into account individual holdings, Altice Usa Inc (ATUS - Free Report) accounts for about 0.47% of the fund's total assets, followed by Verizon Communications Inc (VZ - Free Report) and T-Mobile Us Inc (TMUS - Free Report) .
Its top 10 holdings account for approximately 4.15% of EQAL's total assets under management.
Performance and Risk
The ETF has added about 6.22% so far this year and is down about -7.17% in the last one year (as of 01/17/2023). In the past 52-week period, it has traded between $36.94 and $47.44.
EQAL has a beta of 1.10 and standard deviation of 27.01% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 1000 holdings, it effectively diversifies company-specific risk.
Alternatives
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 - Free Report) tracks S&P 500 Index and the SPDR S&P 500 ETF (SPY - Free Report) tracks S&P 500 Index. IShares Core S&P 500 ETF has $300.66 billion in assets, SPDR S&P 500 ETF has $372.45 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.
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 Russell 1000 Equal Weight ETF (EQAL) a Strong ETF Right Now?
Launched on 12/23/2014, the Invesco Russell 1000 Equal Weight ETF (EQAL - Free Report) is a smart beta exchange traded fund offering 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.
A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.
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.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
EQAL is managed by Invesco, and this fund has amassed over $633.80 million, which makes it one of the larger ETFs in the Style Box - Large Cap Blend. This particular fund, before fees and expenses, seeks to match the performance of the Russell 1000 Equal Weight Index.
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
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.
Annual operating expenses for this ETF are 0.20%, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.84%.
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 13.60% of the portfolio. Its Industrials and Materials round out the top three.
Taking into account individual holdings, Altice Usa Inc (ATUS - Free Report) accounts for about 0.47% of the fund's total assets, followed by Verizon Communications Inc (VZ - Free Report) and T-Mobile Us Inc (TMUS - Free Report) .
Its top 10 holdings account for approximately 4.15% of EQAL's total assets under management.
Performance and Risk
The ETF has added about 6.22% so far this year and is down about -7.17% in the last one year (as of 01/17/2023). In the past 52-week period, it has traded between $36.94 and $47.44.
EQAL has a beta of 1.10 and standard deviation of 27.01% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 1000 holdings, it effectively diversifies company-specific risk.
Alternatives
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 - Free Report) tracks S&P 500 Index and the SPDR S&P 500 ETF (SPY - Free Report) tracks S&P 500 Index. IShares Core S&P 500 ETF has $300.66 billion in assets, SPDR S&P 500 ETF has $372.45 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.
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.