If you're interested in broad exposure to the Financials - Broad segment of the equity market, look no further than the Invesco S&P 500 Equal Weight Financials ETF , a passively managed exchange traded fund launched on 11/01/2006.
While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.
Investor-friendly, sector ETFs provide many options to gain low risk and diversified exposure to a broad group of companies in particular sectors. Financials - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 16, placing it in bottom 0%.
The fund is sponsored by Invesco. It has amassed assets over $286.69 million, making it one of the average sized ETFs attempting to match the performance of the Financials - Broad segment of the equity market. RYF seeks to match the performance of the S&P 500 Equal Weight Financials Index before fees and expenses.
The S&P 500 Equal Weight Financials Index equally weights stocks in the financial sector of the S&P 500 Index.
When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.
Annual operating expenses for this ETF are 0.40%, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 2.35%.
Sector Exposure and Top Holdings
ETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Financials sector--about 100% of the portfolio.
Looking at individual holdings, Cboe Global Markets Inc (
CBOE Quick Quote CBOE - Free Report) accounts for about 1.60% of total assets, followed by Marketaxess Holdings Inc ( MKTX Quick Quote MKTX - Free Report) and Intercontinental Exchange Inc ( ICE Quick Quote ICE - Free Report) .
The top 10 holdings account for about 15.38% of total assets under management.
Performance and Risk
The ETF has lost about -12.43% so far this year and is down about -15.20% in the last one year (as of 05/31/2023). In that past 52-week period, it has traded between $47.84 and $62.20.
The ETF has a beta of 1.07 and standard deviation of 24.84% for the trailing three-year period, making it a medium risk choice in the space. With about 74 holdings, it effectively diversifies company-specific risk.
Invesco S&P 500 Equal Weight Financials ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, RYF is a sufficient option for those seeking exposure to the Financials ETFs area of the market. Investors might also want to consider some other ETF options in the space.
Vanguard Financials ETF (
VFH Quick Quote VFH - Free Report) tracks MSCI US Investable Market Financials 25/50 Index and the Financial Select Sector SPDR ETF ( XLF Quick Quote XLF - Free Report) tracks Financial Select Sector Index. Vanguard Financials ETF has $7.62 billion in assets, Financial Select Sector SPDR ETF has $28.98 billion. VFH has an expense ratio of 0.10% and XLF charges 0.10%. Bottom Line
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