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Is Invesco S&P 500 Equal Weight ETF (RSP) a Strong ETF Right Now?
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Making its debut on 04/24/2003, smart beta exchange traded fund Invesco S&P 500 Equal Weight ETF (RSP - Free Report) provides investors broad exposure to the Style Box - Large Cap Blend category of the market.
What Are Smart Beta ETFs?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.
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.
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.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
The fund is sponsored by Invesco. It has amassed assets over $49.09 billion, making it one of the largest ETFs in the Style Box - Large Cap Blend. This particular fund seeks to match the performance of the S&P 500 Equal Weight Index before fees and expenses.
The S&P 500 Equal Weight Index equally weights the stocks in the S&P 500 Index.
Cost & Other Expenses
For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.
Annual operating expenses for this ETF are 0.20%, making it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 1.63%.
Sector Exposure and Top Holdings
ETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
For RSP, it has heaviest allocation in the Industrials sector --about 15.50% of the portfolio --while Financials and Information Technology round out the top three.
Taking into account individual holdings, Northrop Grumman Corp (NOC - Free Report) accounts for about 0.23% of the fund's total assets, followed by General Dynamics Corp (GD - Free Report) and Unitedhealth Group Inc (UNH - Free Report) .
The top 10 holdings account for about 2.26% of total assets under management.
Performance and Risk
Year-to-date, the Invesco S&P 500 Equal Weight ETF return is roughly 13.62% so far, and was up about 13.59% over the last 12 months (as of 12/27/2023). RSP has traded between $133.66 and $157.91 in this past 52-week period.
The fund has a beta of 1.07 and standard deviation of 17.36% 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 $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 500 Equal Weight ETF (RSP) a Strong ETF Right Now?
Making its debut on 04/24/2003, smart beta exchange traded fund Invesco S&P 500 Equal Weight ETF (RSP - Free Report) provides investors broad exposure to the Style Box - Large Cap Blend category of the market.
What Are Smart Beta ETFs?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.
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.
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.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
The fund is sponsored by Invesco. It has amassed assets over $49.09 billion, making it one of the largest ETFs in the Style Box - Large Cap Blend. This particular fund seeks to match the performance of the S&P 500 Equal Weight Index before fees and expenses.
The S&P 500 Equal Weight Index equally weights the stocks in the S&P 500 Index.
Cost & Other Expenses
For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.
Annual operating expenses for this ETF are 0.20%, making it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 1.63%.
Sector Exposure and Top Holdings
ETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
For RSP, it has heaviest allocation in the Industrials sector --about 15.50% of the portfolio --while Financials and Information Technology round out the top three.
Taking into account individual holdings, Northrop Grumman Corp (NOC - Free Report) accounts for about 0.23% of the fund's total assets, followed by General Dynamics Corp (GD - Free Report) and Unitedhealth Group Inc (UNH - Free Report) .
The top 10 holdings account for about 2.26% of total assets under management.
Performance and Risk
Year-to-date, the Invesco S&P 500 Equal Weight ETF return is roughly 13.62% so far, and was up about 13.59% over the last 12 months (as of 12/27/2023). RSP has traded between $133.66 and $157.91 in this past 52-week period.
The fund has a beta of 1.07 and standard deviation of 17.36% 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 $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.