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Is Invesco S&P 500 Equal Weight ETF (RSP) a Strong ETF Right Now?
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Designed to provide broad exposure to the Style Box - Large Cap Blend category of the market, the Invesco S&P 500 Equal Weight ETF (RSP - Free Report) is a smart beta exchange traded fund launched on 04/24/2003.
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.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
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.
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
The fund is managed by Invesco, and has been able to amass over $34.04 billion, which makes it one of the largest ETFs in the Style Box - Large Cap Blend. Before fees and expenses, RSP seeks to match the performance of the S&P 500 Equal Weight Index.
The S&P 500 Equal Weight Index equally weights the stocks in 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.
Operating expenses on an annual basis are 0.20% for RSP, making it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 1.79%.
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.
Representing 14.70% of the portfolio, the fund has heaviest allocation to the Industrials sector; Information Technology and Financials round out the top three.
Looking at individual holdings, Halliburton Co (HAL - Free Report) accounts for about 0.23% of total assets, followed by Moderna Inc (MRNA - Free Report) and Schlumberger Ltd (SLB - Free Report) .
The top 10 holdings account for about 2.17% of total assets under management.
Performance and Risk
Year-to-date, the Invesco S&P 500 Equal Weight ETF return is roughly 3.36% so far, and is down about -5.55% over the last 12 months (as of 04/14/2023). RSP has traded between $127.28 and $158.96 in this past 52-week period.
The ETF has a beta of 1.05 and standard deviation of 20.40% for the trailing three-year period. With about 505 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco S&P 500 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 $308.92 billion in assets, SPDR S&P 500 ETF has $374.04 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.
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 ETF (RSP) a Strong ETF Right Now?
Designed to provide broad exposure to the Style Box - Large Cap Blend category of the market, the Invesco S&P 500 Equal Weight ETF (RSP - Free Report) is a smart beta exchange traded fund launched on 04/24/2003.
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.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
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.
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
The fund is managed by Invesco, and has been able to amass over $34.04 billion, which makes it one of the largest ETFs in the Style Box - Large Cap Blend. Before fees and expenses, RSP seeks to match the performance of the S&P 500 Equal Weight Index.
The S&P 500 Equal Weight Index equally weights the stocks in 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.
Operating expenses on an annual basis are 0.20% for RSP, making it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 1.79%.
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.
Representing 14.70% of the portfolio, the fund has heaviest allocation to the Industrials sector; Information Technology and Financials round out the top three.
Looking at individual holdings, Halliburton Co (HAL - Free Report) accounts for about 0.23% of total assets, followed by Moderna Inc (MRNA - Free Report) and Schlumberger Ltd (SLB - Free Report) .
The top 10 holdings account for about 2.17% of total assets under management.
Performance and Risk
Year-to-date, the Invesco S&P 500 Equal Weight ETF return is roughly 3.36% so far, and is down about -5.55% over the last 12 months (as of 04/14/2023). RSP has traded between $127.28 and $158.96 in this past 52-week period.
The ETF has a beta of 1.05 and standard deviation of 20.40% for the trailing three-year period. With about 505 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco S&P 500 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 $308.92 billion in assets, SPDR S&P 500 ETF has $374.04 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.
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.