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Is Invesco S&P 100 Equal Weight ETF (EQWL) a Strong ETF Right Now?
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Designed to provide broad exposure to the Style Box - Large Cap Blend category of the market, the Invesco S&P 100 Equal Weight ETF (EQWL - Free Report) is a smart beta exchange traded fund launched on 12/01/2006.
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 work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
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.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination 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
The fund is managed by Invesco. EQWL has been able to amass assets over $437.30 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
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
Operating expenses on an annual basis are 0.25% for EQWL, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.98%.
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.
Representing 19.10% of the portfolio, the fund has heaviest allocation to the Financials sector; Information Technology and Healthcare round out the top three.
Taking into account individual holdings, General Dynamics Corp (GD - Free Report) accounts for about 1.14% of the fund's total assets, followed by Unitedhealth Group Inc (UNH - Free Report) and Cvs Health Corp (CVS - Free Report) .
EQWL's top 10 holdings account for about 11.01% of its total assets under management.
Performance and Risk
So far this year, EQWL has gained about 19.14%, and was up about 19.46% in the last one year (as of 12/27/2023). During this past 52-week period, the fund has traded between $73.93 and $87.46.
The ETF has a beta of 0.98 and standard deviation of 15.88% for the trailing three-year period, making it a medium risk choice in the space. With about 102 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 $387.93 billion in assets, SPDR S&P 500 ETF has $495.12 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?
Designed to provide broad exposure to the Style Box - Large Cap Blend category of the market, the Invesco S&P 100 Equal Weight ETF (EQWL - Free Report) is a smart beta exchange traded fund launched on 12/01/2006.
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 work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
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.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination 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
The fund is managed by Invesco. EQWL has been able to amass assets over $437.30 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
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
Operating expenses on an annual basis are 0.25% for EQWL, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.98%.
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.
Representing 19.10% of the portfolio, the fund has heaviest allocation to the Financials sector; Information Technology and Healthcare round out the top three.
Taking into account individual holdings, General Dynamics Corp (GD - Free Report) accounts for about 1.14% of the fund's total assets, followed by Unitedhealth Group Inc (UNH - Free Report) and Cvs Health Corp (CVS - Free Report) .
EQWL's top 10 holdings account for about 11.01% of its total assets under management.
Performance and Risk
So far this year, EQWL has gained about 19.14%, and was up about 19.46% in the last one year (as of 12/27/2023). During this past 52-week period, the fund has traded between $73.93 and $87.46.
The ETF has a beta of 0.98 and standard deviation of 15.88% for the trailing three-year period, making it a medium risk choice in the space. With about 102 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 $387.93 billion in assets, SPDR S&P 500 ETF has $495.12 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.