We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Is Invesco Russell 1000 Equal Weight ETF (EQAL) a Strong ETF Right Now?
Read MoreHide Full Article
Designed to provide broad exposure to the Style Box - Large Cap Blend category of the market, the Invesco Russell 1000 Equal Weight ETF (EQAL - Free Report) is a smart beta exchange traded fund launched on 12/23/2014.
What Are Smart Beta ETFs?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
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 sponsored by Invesco. It has amassed assets over $646.87 million, making it one of the average sized ETFs in the Style Box - Large Cap Blend. Before fees and expenses, EQAL 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
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 1.56%.
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 EQAL, it has heaviest allocation in the Information Technology sector --about 14% 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 0.87% of the fund's total assets, followed by Lumentum Holdings Inc (LITE - Free Report) and Liberty Broadband Corp (LBRDK - Free Report) .
EQAL's top 10 holdings account for about 6.41% of its total assets under management.
Performance and Risk
The ETF has gained about 15.31% so far this year and it's up approximately 17.10% in the last one year (as of 12/17/2024). In the past 52-week period, it has traded between $42.52 and $51.95.
The fund has a beta of 1.10 and standard deviation of 17.95% for the trailing three-year period, which makes EQAL a medium risk choice in this particular space. With about 995 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.
Vanguard S&P 500 ETF (VOO - Free Report) tracks S&P 500 Index and the SPDR S&P 500 ETF (SPY - Free Report) tracks S&P 500 Index. Vanguard S&P 500 ETF has $592.88 billion in assets, SPDR S&P 500 ETF has $647.25 billion. VOO 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.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Is Invesco Russell 1000 Equal Weight ETF (EQAL) a Strong ETF Right Now?
Designed to provide broad exposure to the Style Box - Large Cap Blend category of the market, the Invesco Russell 1000 Equal Weight ETF (EQAL - Free Report) is a smart beta exchange traded fund launched on 12/23/2014.
What Are Smart Beta ETFs?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
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 sponsored by Invesco. It has amassed assets over $646.87 million, making it one of the average sized ETFs in the Style Box - Large Cap Blend. Before fees and expenses, EQAL 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
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 1.56%.
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 EQAL, it has heaviest allocation in the Information Technology sector --about 14% 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 0.87% of the fund's total assets, followed by Lumentum Holdings Inc (LITE - Free Report) and Liberty Broadband Corp (LBRDK - Free Report) .
EQAL's top 10 holdings account for about 6.41% of its total assets under management.
Performance and Risk
The ETF has gained about 15.31% so far this year and it's up approximately 17.10% in the last one year (as of 12/17/2024). In the past 52-week period, it has traded between $42.52 and $51.95.
The fund has a beta of 1.10 and standard deviation of 17.95% for the trailing three-year period, which makes EQAL a medium risk choice in this particular space. With about 995 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.
Vanguard S&P 500 ETF (VOO - Free Report) tracks S&P 500 Index and the SPDR S&P 500 ETF (SPY - Free Report) tracks S&P 500 Index. Vanguard S&P 500 ETF has $592.88 billion in assets, SPDR S&P 500 ETF has $647.25 billion. VOO 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.