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Is Invesco S&P 500 Equal Weight Industrials ETF (RGI) a Strong ETF Right Now?
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Designed to provide broad exposure to the Industrials ETFs category of the market, the Invesco S&P 500 Equal Weight Industrials ETF is a smart beta exchange traded fund launched on 11/01/2006.
What Are Smart Beta ETFs?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
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.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
The fund is managed by Invesco, and has been able to amass over $364.78 million, which makes it one of the average sized ETFs in the Industrials ETFs. 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
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.
With on par with most peer products in the space, this ETF has annual operating expenses of 0.40%.
It's 12-month trailing dividend yield comes in at 1.12%.
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.
RGI's heaviest allocation is in the Industrials sector, which is about 100% of the portfolio.
When you look at individual holdings, Boeing Co/the (BA - Free Report) accounts for about 1.51% of the fund's total assets, followed by Caterpillar Inc (CAT - Free Report) and Norfolk Southern Corp (NSC - Free Report) .
The top 10 holdings account for about 13.3% of total assets under management.
Performance and Risk
So far this year, RGI has gained about 3.64%, and was up about 1.92% in the last one year (as of 04/17/2023). During this past 52-week period, the fund has traded between $154.92 and $195.63.
RGI has a beta of 1.16 and standard deviation of 22.09% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 72 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 $3.80 billion in assets, Industrial Select Sector SPDR ETF has $13.47 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?
Designed to provide broad exposure to the Industrials ETFs category of the market, the Invesco S&P 500 Equal Weight Industrials ETF is a smart beta exchange traded fund launched on 11/01/2006.
What Are Smart Beta ETFs?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
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.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
The fund is managed by Invesco, and has been able to amass over $364.78 million, which makes it one of the average sized ETFs in the Industrials ETFs. 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
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.
With on par with most peer products in the space, this ETF has annual operating expenses of 0.40%.
It's 12-month trailing dividend yield comes in at 1.12%.
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.
RGI's heaviest allocation is in the Industrials sector, which is about 100% of the portfolio.
When you look at individual holdings, Boeing Co/the (BA - Free Report) accounts for about 1.51% of the fund's total assets, followed by Caterpillar Inc (CAT - Free Report) and Norfolk Southern Corp (NSC - Free Report) .
The top 10 holdings account for about 13.3% of total assets under management.
Performance and Risk
So far this year, RGI has gained about 3.64%, and was up about 1.92% in the last one year (as of 04/17/2023). During this past 52-week period, the fund has traded between $154.92 and $195.63.
RGI has a beta of 1.16 and standard deviation of 22.09% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 72 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 $3.80 billion in assets, Industrial Select Sector SPDR ETF has $13.47 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.