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Is Invesco S&P 500 Equal Weight Utilities ETF (RYU) a Strong ETF Right Now?
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Designed to provide broad exposure to the Utilities/Infrastructure ETFs category of the market, the Invesco S&P 500 Equal Weight Utilities 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.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.
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.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
RYU is managed by Invesco, and this fund has amassed over $375.90 million, which makes it one of the average sized ETFs in the Utilities/Infrastructure ETFs. 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.
Cost & Other Expenses
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
Operating expenses on an annual basis are 0.40% for RYU, making it one of the cheaper products in the space.
It's 12-month trailing dividend yield comes in at 2.30%.
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.
For RYU, it has heaviest allocation in the Utilities sector --about 100% of the portfolio.
When you look at individual holdings, American Water Works Co Inc (AWK - Free Report) accounts for about 3.45% of the fund's total assets, followed by Public Service Enterprise Group Inc (PEG - Free Report) and Southern Co/the (SO - Free Report) .
The top 10 holdings account for about 34.02% of total assets under management.
Performance and Risk
So far this year, RYU has lost about -0.07%, and is up roughly 0.54% in the last one year (as of 05/08/2023). During this past 52-week period, the fund has traded between $101.43 and $127.40.
RYU has a beta of 0.55 and standard deviation of 18.78% for the trailing three-year period, which makes the fund 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 is not a suitable option for investors seeking to outperform the Utilities/Infrastructure ETFs segment of the market. Instead, there are other ETFs in the space which investors should 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 $5.41 billion in assets, Utilities Select Sector SPDR ETF has $16.30 billion. VPU has an expense ratio of 0.10% and XLU 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 Utilities/Infrastructure 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 Utilities ETF (RYU) a Strong ETF Right Now?
Designed to provide broad exposure to the Utilities/Infrastructure ETFs category of the market, the Invesco S&P 500 Equal Weight Utilities 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.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.
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.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
RYU is managed by Invesco, and this fund has amassed over $375.90 million, which makes it one of the average sized ETFs in the Utilities/Infrastructure ETFs. 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.
Cost & Other Expenses
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
Operating expenses on an annual basis are 0.40% for RYU, making it one of the cheaper products in the space.
It's 12-month trailing dividend yield comes in at 2.30%.
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.
For RYU, it has heaviest allocation in the Utilities sector --about 100% of the portfolio.
When you look at individual holdings, American Water Works Co Inc (AWK - Free Report) accounts for about 3.45% of the fund's total assets, followed by Public Service Enterprise Group Inc (PEG - Free Report) and Southern Co/the (SO - Free Report) .
The top 10 holdings account for about 34.02% of total assets under management.
Performance and Risk
So far this year, RYU has lost about -0.07%, and is up roughly 0.54% in the last one year (as of 05/08/2023). During this past 52-week period, the fund has traded between $101.43 and $127.40.
RYU has a beta of 0.55 and standard deviation of 18.78% for the trailing three-year period, which makes the fund 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 is not a suitable option for investors seeking to outperform the Utilities/Infrastructure ETFs segment of the market. Instead, there are other ETFs in the space which investors should 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 $5.41 billion in assets, Utilities Select Sector SPDR ETF has $16.30 billion. VPU has an expense ratio of 0.10% and XLU 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 Utilities/Infrastructure 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.