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Is Invesco S&P 100 Equal Weight ETF (EQWL) a Strong ETF Right Now?
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Making its debut on 12/01/2006, smart beta exchange traded fund Invesco S&P 100 Equal Weight ETF (EQWL - Free Report) provides investors 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.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
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
The fund is managed by Invesco. EQWL has been able to amass assets over $313.55 million, making it one of the average sized ETFs in the Style Box - Large Cap Blend. Before fees and expenses, EQWL seeks to match the performance of the Russell Top 200 Equal Weight Index.
The S&P 100 Equal Weight Index is designed to provide equal-weighted exposure to the securities of the largest 200 companies in the US equity market.
Cost & Other Expenses
Expense ratios are an important factor in the return of an ETF and in the long-term, cheaper funds can significantly outperform their more expensive cousins, other things remaining the same.
Annual operating expenses for EQWL are 0.25%, which makes it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 2%.
Sector Exposure and Top Holdings
Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.
Representing 16.70% of the portfolio, the fund has heaviest allocation to the Financials sector; Information Technology and Healthcare round out the top three.
Looking at individual holdings, Nvidia Corp (NVDA - Free Report) accounts for about 1.59% of total assets, followed by Advanced Micro Devices Inc (AMD - Free Report) and Meta Platforms Inc (META - Free Report) .
Its top 10 holdings account for approximately 12.19% of EQWL's total assets under management.
Performance and Risk
The ETF has added roughly 9.08% and is up about 6.97% so far this year and in the past one year (as of 08/23/2023), respectively. EQWL has traded between $66.43 and $84.42 during this last 52-week period.
The ETF has a beta of 0.98 and standard deviation of 16.61% for the trailing three-year period, making it a medium risk choice in the space. With about 103 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco S&P 100 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 $344.01 billion in assets, SPDR S&P 500 ETF has $406.96 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 100 Equal Weight ETF (EQWL) a Strong ETF Right Now?
Making its debut on 12/01/2006, smart beta exchange traded fund Invesco S&P 100 Equal Weight ETF (EQWL - Free Report) provides investors 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.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
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
The fund is managed by Invesco. EQWL has been able to amass assets over $313.55 million, making it one of the average sized ETFs in the Style Box - Large Cap Blend. Before fees and expenses, EQWL seeks to match the performance of the Russell Top 200 Equal Weight Index.
The S&P 100 Equal Weight Index is designed to provide equal-weighted exposure to the securities of the largest 200 companies in the US equity market.
Cost & Other Expenses
Expense ratios are an important factor in the return of an ETF and in the long-term, cheaper funds can significantly outperform their more expensive cousins, other things remaining the same.
Annual operating expenses for EQWL are 0.25%, which makes it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 2%.
Sector Exposure and Top Holdings
Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.
Representing 16.70% of the portfolio, the fund has heaviest allocation to the Financials sector; Information Technology and Healthcare round out the top three.
Looking at individual holdings, Nvidia Corp (NVDA - Free Report) accounts for about 1.59% of total assets, followed by Advanced Micro Devices Inc (AMD - Free Report) and Meta Platforms Inc (META - Free Report) .
Its top 10 holdings account for approximately 12.19% of EQWL's total assets under management.
Performance and Risk
The ETF has added roughly 9.08% and is up about 6.97% so far this year and in the past one year (as of 08/23/2023), respectively. EQWL has traded between $66.43 and $84.42 during this last 52-week period.
The ETF has a beta of 0.98 and standard deviation of 16.61% for the trailing three-year period, making it a medium risk choice in the space. With about 103 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco S&P 100 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 $344.01 billion in assets, SPDR S&P 500 ETF has $406.96 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.