Looking for broad exposure to the Energy - Broad segment of the equity market? You should consider the Invesco S&P 500 Equal Weight Energy ETF , a passively managed exchange traded fund launched on 11/01/2006.
An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also excellent vehicles for long term investors.
Investor-friendly, sector ETFs provide many options to gain low risk and diversified exposure to a broad group of companies in particular sectors. Energy - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 14, placing it in bottom 13%.
The fund is sponsored by Invesco. It has amassed assets over $530.26 million, making it one of the average sized ETFs attempting to match the performance of the Energy - Broad segment of the equity market. RYE seeks to match the performance of the S&P 500 Equal Weight Energy Index before fees and expenses.
The S&P 500 Equal Weight Energy Plus Index equally weights stocks in the energy sector of the S&P 500 Index.
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.
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 3.80%.
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.
This ETF has heaviest allocation in the Energy sector--about 100% of the portfolio.
Looking at individual holdings, Hess Corp (
HES Quick Quote HES - Free Report) accounts for about 4.58% of total assets, followed by Marathon Oil Corp ( MRO Quick Quote MRO - Free Report) and Apa Corp ( APA Quick Quote APA - Free Report) .
The top 10 holdings account for about 44.69% of total assets under management.
Performance and Risk
The ETF has lost about -3.34% and it's up approximately 7.35% so far this year and in the past one year (as of 05/01/2023), respectively. RYE has traded between $57.66 and $81.27 during this last 52-week period.
The ETF has a beta of 1.60 and standard deviation of 41.05% for the trailing three-year period, making it a high risk choice in the space. With about 24 holdings, it has more concentrated exposure than peers.
Invesco S&P 500 Equal Weight Energy ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, RYE is a great option for investors seeking exposure to the Energy ETFs segment of the market. There are other additional ETFs in the space that investors could consider as well.
Vanguard Energy ETF (
VDE Quick Quote VDE - Free Report) tracks MSCI US Investable Market Energy 25/50 Index and the Energy Select Sector SPDR ETF ( XLE Quick Quote XLE - Free Report) tracks Energy Select Sector Index. Vanguard Energy ETF has $7.83 billion in assets, Energy Select Sector SPDR ETF has $38.68 billion. VDE has an expense ratio of 0.10% and XLE charges 0.10%. Bottom Line
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Zacks ETF Center.