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Is Invesco S&P 500 Equal Weight Health Care ETF (RSPH) a Strong ETF Right Now?
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Making its debut on 11/01/2006, smart beta exchange traded fund Invesco S&P 500 Equal Weight Health Care ETF (RSPH - Free Report) provides investors broad exposure to the Health Care ETFs 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.
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.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.
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.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
Because the fund has amassed over $1.01 billion, this makes it one of the larger ETFs in the Health Care ETFs. RSPH is managed by Invesco. RSPH, before fees and expenses, seeks to match the performance of the S&P 500 EQUAL WEIGHT HEALTH CARE INDEX .
The S&P 500 Equal Weight Health Care Index equally weights stocks in the health care sector of the S&P 500 Index.
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.
With one of the cheaper products in the space, this ETF has annual operating expenses of 0.40%.
RSPH's 12-month trailing dividend yield is 0.63%.
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 RSPH, it has heaviest allocation in the Healthcare sector --about 100% of the portfolio.
Looking at individual holdings, Illumina Inc (ILMN - Free Report) accounts for about 1.82% of total assets, followed by Align Technology Inc (ALGN - Free Report) and Catalent Inc (CTLT - Free Report) .
Its top 10 holdings account for approximately 17.16% of RSPH's total assets under management.
Performance and Risk
So far this year, RSPH return is roughly 4.84%, and is up about 11.84% in the last one year (as of 03/18/2024). During this past 52-week period, the fund has traded between $25.30 and $31.69.
The ETF has a beta of 0.83 and standard deviation of 16.12% for the trailing three-year period. With about 66 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco S&P 500 Equal Weight Health Care ETF is a reasonable option for investors seeking to outperform the Health Care ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
Vanguard Health Care ETF (VHT - Free Report) tracks MSCI US Investable Market Health Care 25/50 Index and the Health Care Select Sector SPDR ETF (XLV - Free Report) tracks Health Care Select Sector Index. Vanguard Health Care ETF has $17.89 billion in assets, Health Care Select Sector SPDR ETF has $41.09 billion. VHT has an expense ratio of 0.10% and XLV 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 Health Care ETFs.
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 Health Care ETF (RSPH) a Strong ETF Right Now?
Making its debut on 11/01/2006, smart beta exchange traded fund Invesco S&P 500 Equal Weight Health Care ETF (RSPH - Free Report) provides investors broad exposure to the Health Care ETFs 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.
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.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.
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.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
Because the fund has amassed over $1.01 billion, this makes it one of the larger ETFs in the Health Care ETFs. RSPH is managed by Invesco. RSPH, before fees and expenses, seeks to match the performance of the S&P 500 EQUAL WEIGHT HEALTH CARE INDEX .
The S&P 500 Equal Weight Health Care Index equally weights stocks in the health care sector of the S&P 500 Index.
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.
With one of the cheaper products in the space, this ETF has annual operating expenses of 0.40%.
RSPH's 12-month trailing dividend yield is 0.63%.
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 RSPH, it has heaviest allocation in the Healthcare sector --about 100% of the portfolio.
Looking at individual holdings, Illumina Inc (ILMN - Free Report) accounts for about 1.82% of total assets, followed by Align Technology Inc (ALGN - Free Report) and Catalent Inc (CTLT - Free Report) .
Its top 10 holdings account for approximately 17.16% of RSPH's total assets under management.
Performance and Risk
So far this year, RSPH return is roughly 4.84%, and is up about 11.84% in the last one year (as of 03/18/2024). During this past 52-week period, the fund has traded between $25.30 and $31.69.
The ETF has a beta of 0.83 and standard deviation of 16.12% for the trailing three-year period. With about 66 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco S&P 500 Equal Weight Health Care ETF is a reasonable option for investors seeking to outperform the Health Care ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
Vanguard Health Care ETF (VHT - Free Report) tracks MSCI US Investable Market Health Care 25/50 Index and the Health Care Select Sector SPDR ETF (XLV - Free Report) tracks Health Care Select Sector Index. Vanguard Health Care ETF has $17.89 billion in assets, Health Care Select Sector SPDR ETF has $41.09 billion. VHT has an expense ratio of 0.10% and XLV 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 Health Care ETFs.
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.