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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?
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.
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.
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.
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.
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
Managed by Invesco, EQWL has amassed assets over $541.53 million, making it one of the average sized ETFs in the Style Box - Large Cap Blend. Before fees and expenses, this particular fund 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.
With on par with most peer products in the space, this ETF has annual operating expenses of 0.25%.
EQWL's 12-month trailing dividend yield is 1.90%.
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.
For EQWL, it has heaviest allocation in the Financials sector --about 18.50% of the portfolio --while Information Technology and Healthcare round out the top three.
When you look at individual holdings, Broadcom Inc (AVGO - Free Report) accounts for about 1.15% of the fund's total assets, followed by Caterpillar Inc (CAT - Free Report) and Morgan Stanley (MS - Free Report) .
The top 10 holdings account for about 10.66% of total assets under management.
Performance and Risk
The ETF has gained about 3.77% so far this year and is up about 20.14% in the last one year (as of 02/27/2024). In the past 52-week period, it has traded between $74.20 and $91.31.
The fund has a beta of 0.98 and standard deviation of 15.65% for the trailing three-year period, which makes EQWL a medium risk choice in this particular 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 $441.66 billion in assets, SPDR S&P 500 ETF has $500.62 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?
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.
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.
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.
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.
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
Managed by Invesco, EQWL has amassed assets over $541.53 million, making it one of the average sized ETFs in the Style Box - Large Cap Blend. Before fees and expenses, this particular fund 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.
With on par with most peer products in the space, this ETF has annual operating expenses of 0.25%.
EQWL's 12-month trailing dividend yield is 1.90%.
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.
For EQWL, it has heaviest allocation in the Financials sector --about 18.50% of the portfolio --while Information Technology and Healthcare round out the top three.
When you look at individual holdings, Broadcom Inc (AVGO - Free Report) accounts for about 1.15% of the fund's total assets, followed by Caterpillar Inc (CAT - Free Report) and Morgan Stanley (MS - Free Report) .
The top 10 holdings account for about 10.66% of total assets under management.
Performance and Risk
The ETF has gained about 3.77% so far this year and is up about 20.14% in the last one year (as of 02/27/2024). In the past 52-week period, it has traded between $74.20 and $91.31.
The fund has a beta of 0.98 and standard deviation of 15.65% for the trailing three-year period, which makes EQWL a medium risk choice in this particular 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 $441.66 billion in assets, SPDR S&P 500 ETF has $500.62 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.