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Should You Invest in the Invesco S&P 500 Equal Weight Utilities ETF (RYU)?

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Looking for broad exposure to the Utilities - Broad segment of the equity market? You should consider the Invesco S&P 500 Equal Weight Utilities ETF , a passively managed exchange traded fund launched on 11/01/2006.

Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.

Additionally, sector ETFs offer convenient ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. Utilities - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 3, placing it in top 19%.

Index Details

The fund is sponsored by Invesco. It has amassed assets over $383.34 million, making it one of the average sized ETFs attempting to match the performance of the Utilities - Broad segment of the equity market. RYU seeks to match the performance of the S&P 500 Equal Weight Telecommunication Services & Utilities Index before fees and expenses.

The S&P 500 Equal Weight Telecommunication Services & Utilities Index equally weights stocks found in the utilities and telecommunication services sectors of the S&P 500 Index.

Costs

Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are the same.

Annual operating expenses for this ETF are 0.40%, making it one of the cheaper products in the space.

It has a 12-month trailing dividend yield of 2.54%.

Sector Exposure and Top Holdings

Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.

This ETF has heaviest allocation in the Utilities sector--about 100% of the portfolio.

Looking at individual holdings, Pg&e Corp (PCG - Free Report) accounts for about 3.42% of total assets, followed by Dominion Energy Inc (D - Free Report) and Exelon Corp (EXC - Free Report) .

The top 10 holdings account for about 30.35% of total assets under management.

Performance and Risk

The ETF has lost about -7.44% and is up about 1.43% so far this year and in the past one year (as of 03/02/2023), respectively. RYU has traded between $101.43 and $127.40 during this last 52-week period.

The ETF has a beta of 0.54 and standard deviation of 26.88% for the trailing three-year period, making it a medium risk choice in the space. With about 32 holdings, it has more concentrated exposure than peers.

Alternatives

Invesco S&P 500 Equal Weight Utilities ETF sports a Zacks ETF Rank of 4 (Sell), which is based on expected asset class return, expense ratio, and momentum, among other factors. RYU, then, is not a great choice for investors seeking exposure to the Utilities/Infrastructure ETFs segment of the market. Instead, there are better ETFs in the space to consider.

Vanguard Utilities ETF (VPU - Free Report) tracks MSCI US Investable Market Utilities 25/50 Index and the Utilities Select Sector SPDR ETF (XLU - Free Report) tracks Utilities Select Sector Index. Vanguard Utilities ETF has $5.20 billion in assets, Utilities Select Sector SPDR ETF has $14.13 billion. VPU has an expense ratio of 0.10% and XLU charges 0.10%.

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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