For investors seeking momentum, PowerShares Russell Top 200 Equal Weight Portfolio (EQWL - Free Report) is probably on radar now. The fund just hit a 52-week high and is up around 23% from its 52-week low price of $40.45/share.
But are more gains in store for this ETF? Let’s take a quick look at the fund and the near-term outlook on it to get a better idea on where it might be headed:
EQWL in Focus
This ETF offers equal-weighted exposure to the securities of the largest 200 companies in the U.S. equity market. It has key holdings in information technology, financials, healthcare, consumer discretionary and industrials. It charges 0.25% in expense ratio and is less popular in the large-cap space with AUM of under $50 million (see: all the Large-Cap ETFs here).
Why the Move?
The broad U.S. stock market has been an area to watch lately given the unscathed rally in the S&P 500, which has breached the 2500 mark dodging all the ills of economy and politics. Strong corporate earnings, still-low interest rates, improving health of economies around the world and rounds of upbeat economic data are fueling growth in the stocks. Equal-weighted ETFs have also joined the rally, as they tend to cash in on the overvalued segments and reinvest in the underperforming ones, allowing outperformance when the trends reverse.
More Gains Ahead?
Currently, EQWL has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook. Therefore, it is hard to get a handle on its future returns one way or the other. However, many of the segments that make up this ETF have a strong Zacks Industry Rank, so there is definitely still some promise for those who want to ride on this surging ETF a little longer.
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