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Is Invesco Russell 1000 Equal Weight ETF (EQAL) a Strong ETF Right Now?
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Making its debut on 12/23/2014, smart beta exchange traded fund Invesco Russell 1000 Equal Weight ETF (EQAL - Free Report) provides investors 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.
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.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
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.
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
The fund is managed by Invesco. EQAL has been able to amass assets over $583.72 million, making it one of the larger ETFs in the Style Box - Large Cap Blend. This particular fund, before fees and expenses, 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 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 1.90%.
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.
EQAL's heaviest allocation is in the Information Technology sector, which is about 13.60% of the portfolio. Its Financials and Industrials round out the top three.
Looking at individual holdings, Lumentum Holdings Inc (LITE - Free Report) accounts for about 0.52% of total assets, followed by Ubiquiti Inc (UI - Free Report) and Viasat Inc (VSAT - Free Report) .
Its top 10 holdings account for approximately 4.91% of EQAL's total assets under management.
Performance and Risk
The ETF has lost about -0.73% and is up about 4.28% so far this year and in the past one year (as of 01/31/2024), respectively. EQAL has traded between $37.43 and $44.80 during this last 52-week period.
EQAL has a beta of 1.12 and standard deviation of 18.38% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 998 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 $421.50 billion in assets, SPDR S&P 500 ETF has $494.14 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?
Making its debut on 12/23/2014, smart beta exchange traded fund Invesco Russell 1000 Equal Weight ETF (EQAL - Free Report) provides investors 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.
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.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
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.
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
The fund is managed by Invesco. EQAL has been able to amass assets over $583.72 million, making it one of the larger ETFs in the Style Box - Large Cap Blend. This particular fund, before fees and expenses, 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 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 1.90%.
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.
EQAL's heaviest allocation is in the Information Technology sector, which is about 13.60% of the portfolio. Its Financials and Industrials round out the top three.
Looking at individual holdings, Lumentum Holdings Inc (LITE - Free Report) accounts for about 0.52% of total assets, followed by Ubiquiti Inc (UI - Free Report) and Viasat Inc (VSAT - Free Report) .
Its top 10 holdings account for approximately 4.91% of EQAL's total assets under management.
Performance and Risk
The ETF has lost about -0.73% and is up about 4.28% so far this year and in the past one year (as of 01/31/2024), respectively. EQAL has traded between $37.43 and $44.80 during this last 52-week period.
EQAL has a beta of 1.12 and standard deviation of 18.38% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 998 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 $421.50 billion in assets, SPDR S&P 500 ETF has $494.14 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.