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Is Invesco S&P 500 Equal Weight ETF (RSP) a Strong ETF Right Now?
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Launched on 04/24/2003, the Invesco S&P 500 Equal Weight ETF (RSP - Free Report) is a smart beta exchange traded fund offering broad exposure to the Style Box - Large Cap Blend category of the market.
What Are Smart Beta ETFs?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.
Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
Managed by Invesco, RSP has amassed assets over $35.59 billion, making it one of the largest ETFs in the Style Box - Large Cap Blend. RSP, before fees and expenses, 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
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.
Operating expenses on an annual basis are 0.20% for this ETF, which makes it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 1.76%.
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.
This ETF has heaviest allocation in the Industrials sector - about 15.20% of the portfolio. Information Technology and Financials round out the top three.
When you look at individual holdings, Nvidia Corp (NVDA - Free Report) accounts for about 0.24% of the fund's total assets, followed by Intel Corp (INTC - Free Report) and Mccormick & Co Inc/md (MKC - Free Report) .
RSP's top 10 holdings account for about 2.29% of its total assets under management.
Performance and Risk
The ETF has added about 4.94% so far this year and is up roughly 11.17% in the last one year (as of 06/14/2023). In the past 52-week period, it has traded between $127.28 and $154.96.
RSP has a beta of 1.06 and standard deviation of 18.38% for the trailing three-year period. With about 504 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 $323.97 billion in assets, SPDR S&P 500 ETF has $414.10 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?
Launched on 04/24/2003, the Invesco S&P 500 Equal Weight ETF (RSP - Free Report) is a smart beta exchange traded fund offering broad exposure to the Style Box - Large Cap Blend category of the market.
What Are Smart Beta ETFs?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.
Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
Managed by Invesco, RSP has amassed assets over $35.59 billion, making it one of the largest ETFs in the Style Box - Large Cap Blend. RSP, before fees and expenses, 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
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.
Operating expenses on an annual basis are 0.20% for this ETF, which makes it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 1.76%.
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.
This ETF has heaviest allocation in the Industrials sector - about 15.20% of the portfolio. Information Technology and Financials round out the top three.
When you look at individual holdings, Nvidia Corp (NVDA - Free Report) accounts for about 0.24% of the fund's total assets, followed by Intel Corp (INTC - Free Report) and Mccormick & Co Inc/md (MKC - Free Report) .
RSP's top 10 holdings account for about 2.29% of its total assets under management.
Performance and Risk
The ETF has added about 4.94% so far this year and is up roughly 11.17% in the last one year (as of 06/14/2023). In the past 52-week period, it has traded between $127.28 and $154.96.
RSP has a beta of 1.06 and standard deviation of 18.38% for the trailing three-year period. With about 504 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 $323.97 billion in assets, SPDR S&P 500 ETF has $414.10 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.