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Is Invesco Russell 1000 Equal Weight ETF (EQAL) a Strong ETF Right Now?
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Making its debut on 12/23/2014, smart beta exchange traded fund Invesco Russell 1000 Equal Weight ETF (EQAL - Free Report) provides investors broad exposure to the Style Box - Large Cap Blend 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.
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.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of 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
Managed by Invesco, EQAL has amassed assets over $587.22 million, making 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
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
With on par with most peer products in the space, this ETF has annual operating expenses of 0.20%.
It's 12-month trailing dividend yield comes in at 2%.
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.
This ETF has heaviest allocation in the Information Technology sector - about 14.80% of the portfolio. Industrials and Healthcare round out the top three.
Looking at individual holdings, Altice Usa Inc (ATUS - Free Report) accounts for about 0.47% of total assets, followed by Verizon Communications Inc (VZ - Free Report) and T-Mobile Us Inc (TMUS - Free Report) .
The top 10 holdings account for about 4.15% of total assets under management.
Performance and Risk
The ETF has lost about -2.44% so far this year and is down about -12.51% in the last one year (as of 03/20/2023). In the past 52-week period, it has traded between $36.94 and $47.44.
The fund has a beta of 1.11 and standard deviation of 24.01% for the trailing three-year period, which makes EQAL a medium risk choice in this particular 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 $294 billion in assets, SPDR S&P 500 ETF has $346.21 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?
Making its debut on 12/23/2014, smart beta exchange traded fund Invesco Russell 1000 Equal Weight ETF (EQAL - Free Report) provides investors broad exposure to the Style Box - Large Cap Blend 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.
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.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of 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
Managed by Invesco, EQAL has amassed assets over $587.22 million, making 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
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
With on par with most peer products in the space, this ETF has annual operating expenses of 0.20%.
It's 12-month trailing dividend yield comes in at 2%.
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.
This ETF has heaviest allocation in the Information Technology sector - about 14.80% of the portfolio. Industrials and Healthcare round out the top three.
Looking at individual holdings, Altice Usa Inc (ATUS - Free Report) accounts for about 0.47% of total assets, followed by Verizon Communications Inc (VZ - Free Report) and T-Mobile Us Inc (TMUS - Free Report) .
The top 10 holdings account for about 4.15% of total assets under management.
Performance and Risk
The ETF has lost about -2.44% so far this year and is down about -12.51% in the last one year (as of 03/20/2023). In the past 52-week period, it has traded between $36.94 and $47.44.
The fund has a beta of 1.11 and standard deviation of 24.01% for the trailing three-year period, which makes EQAL a medium risk choice in this particular 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 $294 billion in assets, SPDR S&P 500 ETF has $346.21 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.