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Is Invesco Russell 1000 Equal Weight ETF (EQAL) a Strong ETF Right Now?
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A smart beta exchange traded fund, the Invesco Russell 1000 Equal Weight ETF (EQAL - Free Report) debuted on 12/23/2014, and offers broad exposure to the Style Box - Large Cap Blend category of the market.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
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.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
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.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
Because the fund has amassed over $665.62 million, this makes it one of the larger ETFs in the Style Box - Large Cap Blend. EQAL is managed by Invesco. Before fees and expenses, this particular fund seeks to match the performance of the Russell 1000 Equal Weight Index.
The Russell 1000 Equal Weight Index is composed of securities in the Russell 1000 Index and is equally weighted across nine sector groups with each security within the sector receiving equal weight.
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.
Annual operating expenses for EQAL are 0.20%, which makes it on par with most peer products in the space.
EQAL's 12-month trailing dividend yield is 1.78%.
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 Information Technology sector - about 13.10% of the portfolio. Industrials and Financials round out the top three.
Looking at individual holdings, Arista Networks Inc (ANET - Free Report) accounts for about 0.51% of total assets, followed by Juniper Networks Inc (JNPR - Free Report) and Roku Inc (ROKU - Free Report) .
The top 10 holdings account for about 4.86% of total assets under management.
Performance and Risk
The ETF has gained about 8.88% and was up about 8.15% so far this year and in the past one year (as of 07/25/2023), respectively. EQAL has traded between $36.94 and $44.80 during this last 52-week period.
The ETF has a beta of 1.11 and standard deviation of 18.98% for the trailing three-year period, making it a medium risk choice in the space. With about 995 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco Russell 1000 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 $348.87 billion in assets, SPDR S&P 500 ETF has $425.67 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 Russell 1000 Equal Weight ETF (EQAL) a Strong ETF Right Now?
A smart beta exchange traded fund, the Invesco Russell 1000 Equal Weight ETF (EQAL - Free Report) debuted on 12/23/2014, and offers broad exposure to the Style Box - Large Cap Blend category of the market.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
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.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
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.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
Because the fund has amassed over $665.62 million, this makes it one of the larger ETFs in the Style Box - Large Cap Blend. EQAL is managed by Invesco. Before fees and expenses, this particular fund seeks to match the performance of the Russell 1000 Equal Weight Index.
The Russell 1000 Equal Weight Index is composed of securities in the Russell 1000 Index and is equally weighted across nine sector groups with each security within the sector receiving equal weight.
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.
Annual operating expenses for EQAL are 0.20%, which makes it on par with most peer products in the space.
EQAL's 12-month trailing dividend yield is 1.78%.
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 Information Technology sector - about 13.10% of the portfolio. Industrials and Financials round out the top three.
Looking at individual holdings, Arista Networks Inc (ANET - Free Report) accounts for about 0.51% of total assets, followed by Juniper Networks Inc (JNPR - Free Report) and Roku Inc (ROKU - Free Report) .
The top 10 holdings account for about 4.86% of total assets under management.
Performance and Risk
The ETF has gained about 8.88% and was up about 8.15% so far this year and in the past one year (as of 07/25/2023), respectively. EQAL has traded between $36.94 and $44.80 during this last 52-week period.
The ETF has a beta of 1.11 and standard deviation of 18.98% for the trailing three-year period, making it a medium risk choice in the space. With about 995 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco Russell 1000 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 $348.87 billion in assets, SPDR S&P 500 ETF has $425.67 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.