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Is Invesco Russell 1000 Equal Weight ETF (EQAL) a Strong ETF Right Now?
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Launched on 12/23/2014, the Invesco Russell 1000 Equal Weight ETF (EQAL - Free Report) is a smart beta exchange traded fund offering broad exposure to the Style Box - Large Cap Blend category of the market.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
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.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
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.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
The fund is managed by Invesco. EQAL has been able to amass assets over $621.92 million, making it one of the average sized ETFs in the Style Box - Large Cap Blend. EQAL seeks to match the performance of the Russell 1000 Equal Weight Index before fees and expenses.
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
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 EQAL are 0.20%, which makes it on par with most peer products in the space.
EQAL's 12-month trailing dividend yield is 1.60%.
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 EQAL, it has heaviest allocation in the Information Technology sector --about 12.80% of the portfolio --while Financials and Industrials round out the top three.
Taking into account individual holdings, Ubiquiti Inc (UI - Free Report) accounts for about 0.71% of the fund's total assets, followed by Charter Communications Inc (CHTR - Free Report) and Roku Inc (ROKU - Free Report) .
EQAL's top 10 holdings account for about 6.06% of its total assets under management.
Performance and Risk
The ETF has added roughly 12.34% and it's up approximately 25.01% so far this year and in the past one year (as of 10/14/2024), respectively. EQAL has traded between $37.43 and $48.97 during this last 52-week period.
The fund has a beta of 1.10 and standard deviation of 18.14% for the trailing three-year period, which makes EQAL a medium risk choice in this particular space. With about 996 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 $543.93 billion in assets, SPDR S&P 500 ETF has $588.02 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?
Launched on 12/23/2014, the Invesco Russell 1000 Equal Weight ETF (EQAL - Free Report) is a smart beta exchange traded fund offering broad exposure to the Style Box - Large Cap Blend category of the market.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
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.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
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.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
The fund is managed by Invesco. EQAL has been able to amass assets over $621.92 million, making it one of the average sized ETFs in the Style Box - Large Cap Blend. EQAL seeks to match the performance of the Russell 1000 Equal Weight Index before fees and expenses.
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
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 EQAL are 0.20%, which makes it on par with most peer products in the space.
EQAL's 12-month trailing dividend yield is 1.60%.
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 EQAL, it has heaviest allocation in the Information Technology sector --about 12.80% of the portfolio --while Financials and Industrials round out the top three.
Taking into account individual holdings, Ubiquiti Inc (UI - Free Report) accounts for about 0.71% of the fund's total assets, followed by Charter Communications Inc (CHTR - Free Report) and Roku Inc (ROKU - Free Report) .
EQAL's top 10 holdings account for about 6.06% of its total assets under management.
Performance and Risk
The ETF has added roughly 12.34% and it's up approximately 25.01% so far this year and in the past one year (as of 10/14/2024), respectively. EQAL has traded between $37.43 and $48.97 during this last 52-week period.
The fund has a beta of 1.10 and standard deviation of 18.14% for the trailing three-year period, which makes EQAL a medium risk choice in this particular space. With about 996 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 $543.93 billion in assets, SPDR S&P 500 ETF has $588.02 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.