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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?
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.
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.
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
RSP is managed by Invesco, and this fund has amassed over $49.52 billion, which makes it one of the largest ETFs in the Style Box - Large Cap Blend. Before fees and expenses, RSP 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
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 0.20% for RSP, making it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 1.59%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
For RSP, it has heaviest allocation in the Industrials sector --about 16% of the portfolio --while Financials and Information Technology round out the top three.
Looking at individual holdings, Invesco Government & Agency Portfolio (AGPXX) accounts for about 0.30% of total assets, followed by Enphase Energy Inc (ENPH - Free Report) and Illumina Inc (ILMN - Free Report) .
The top 10 holdings account for about 2.36% of total assets under management.
Performance and Risk
The ETF has gained about 2.70% so far this year and is up roughly 11.98% in the last one year (as of 02/28/2024). In the past 52-week period, it has traded between $133.66 and $162.06.
The fund has a beta of 1.06 and standard deviation of 17.14% for the trailing three-year period. With about 505 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 $442.91 billion in assets, SPDR S&P 500 ETF has $498.23 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?
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.
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.
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
RSP is managed by Invesco, and this fund has amassed over $49.52 billion, which makes it one of the largest ETFs in the Style Box - Large Cap Blend. Before fees and expenses, RSP 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
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 0.20% for RSP, making it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 1.59%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
For RSP, it has heaviest allocation in the Industrials sector --about 16% of the portfolio --while Financials and Information Technology round out the top three.
Looking at individual holdings, Invesco Government & Agency Portfolio (AGPXX) accounts for about 0.30% of total assets, followed by Enphase Energy Inc (ENPH - Free Report) and Illumina Inc (ILMN - Free Report) .
The top 10 holdings account for about 2.36% of total assets under management.
Performance and Risk
The ETF has gained about 2.70% so far this year and is up roughly 11.98% in the last one year (as of 02/28/2024). In the past 52-week period, it has traded between $133.66 and $162.06.
The fund has a beta of 1.06 and standard deviation of 17.14% for the trailing three-year period. With about 505 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 $442.91 billion in assets, SPDR S&P 500 ETF has $498.23 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.