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Is Invesco S&P 500 Equal Weight ETF (RSP) a Strong ETF Right Now?
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A smart beta exchange traded fund, the Invesco S&P 500 Equal Weight ETF (RSP - Free Report) debuted on 04/24/2003, and offers broad exposure to the Style Box - Large Cap Blend category of the market.
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.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
RSP is managed by Invesco, and this fund has amassed over $42.76 billion, which makes 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
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 this ETF are 0.20%, making it on par with most peer products in the space.
RSP's 12-month trailing dividend yield is 1.72%.
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.
This ETF has heaviest allocation in the Industrials sector - about 15.20% of the portfolio. Information Technology and Financials round out the top three.
Looking at individual holdings, Nvidia Corp (NVDA - Free Report) accounts for about 0.33% 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 2.79% of RSP's total assets under management.
Performance and Risk
The ETF has added roughly 5.65% so far this year and is up about 3.08% in the last one year (as of 08/24/2023). In the past 52-week period, it has traded between $127.28 and $155.
RSP has a beta of 1.06 and standard deviation of 18.02% 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 $347.88 billion in assets, SPDR S&P 500 ETF has $408.61 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?
A smart beta exchange traded fund, the Invesco S&P 500 Equal Weight ETF (RSP - Free Report) debuted on 04/24/2003, and offers broad exposure to the Style Box - Large Cap Blend category of the market.
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.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
RSP is managed by Invesco, and this fund has amassed over $42.76 billion, which makes 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
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 this ETF are 0.20%, making it on par with most peer products in the space.
RSP's 12-month trailing dividend yield is 1.72%.
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.
This ETF has heaviest allocation in the Industrials sector - about 15.20% of the portfolio. Information Technology and Financials round out the top three.
Looking at individual holdings, Nvidia Corp (NVDA - Free Report) accounts for about 0.33% 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 2.79% of RSP's total assets under management.
Performance and Risk
The ETF has added roughly 5.65% so far this year and is up about 3.08% in the last one year (as of 08/24/2023). In the past 52-week period, it has traded between $127.28 and $155.
RSP has a beta of 1.06 and standard deviation of 18.02% 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 $347.88 billion in assets, SPDR S&P 500 ETF has $408.61 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.