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Should You Invest in the Invesco S&P 500 Equal Weight Utilities ETF (RYU)?
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Designed to provide broad exposure to the Utilities - Broad segment of the equity market, the Invesco S&P 500 Equal Weight Utilities ETF is a passively managed exchange traded fund launched on 11/01/2006.
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.
Sector ETFs also provide investors access to a broad group of companies in particular sectors that offer low risk and diversified exposure. Utilities - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 3, placing it in top 19%.
Index Details
The fund is sponsored by Invesco. It has amassed assets over $404.74 M, making it one of the average sized ETFs attempting to match the performance of the Utilities - Broad segment of the equity market. RYU seeks to match the performance of the S&P 500 Equal Weight Telecommunication Services & Utilities Index before fees and expenses.
This index is an unmanaged equal weighted version of the S&P 500 Utilities Index that consists of common stocks of the following industries: electric utilities, gas utilities, multi-utilities & unregulated power & water utilities,telecommunication service companies, including fixed-line, cellular, wireless, high bandwidth & fiber-optic cable networks.
Costs
When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.
Annual operating expenses for this ETF are 0.40%, making it one of the cheaper products in the space.
It has a 12-month trailing dividend yield of 2.45%.
Sector Exposure and Top Holdings
ETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Utilities sector--about 100% of the portfolio.
Looking at individual holdings, Nextera Energy Inc (NEE - Free Report) accounts for about 3.72% of total assets, followed by Ppl Corp (PPL - Free Report) and Dominion Energy Inc (D - Free Report) .
The top 10 holdings account for about 36.49% of total assets under management.
Performance and Risk
The ETF return is roughly 22.33% so far this year and it's up approximately 18.92% in the last one year (as of 10/25/2019). In that past 52-week period, it has traded between $86.44 and $107.12.
The ETF has a beta of 0.23 and standard deviation of 12.74% for the trailing three-year period, making it a medium risk choice in the space. With about 28 holdings, it has more concentrated exposure than peers.
Alternatives
Invesco S&P 500 Equal Weight Utilities ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, RYU is a sufficient option for those seeking exposure to the Utilities/Infrastructure ETFs area of the market. Investors might also want to consider some other ETF options in the space.
Vanguard Utilities ETF (VPU - Free Report) tracks MSCI US Investable Market Utilities 25/50 Index and the Utilities Select Sector SPDR Fund (XLU - Free Report) tracks Utilities Select Sector Index. Vanguard Utilities ETF has $4.38 B in assets, Utilities Select Sector SPDR Fund has $11.56 B. VPU has an expense ratio of 0.10% and XLU charges 0.13%.
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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Should You Invest in the Invesco S&P 500 Equal Weight Utilities ETF (RYU)?
Designed to provide broad exposure to the Utilities - Broad segment of the equity market, the Invesco S&P 500 Equal Weight Utilities ETF is a passively managed exchange traded fund launched on 11/01/2006.
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.
Sector ETFs also provide investors access to a broad group of companies in particular sectors that offer low risk and diversified exposure. Utilities - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 3, placing it in top 19%.
Index Details
The fund is sponsored by Invesco. It has amassed assets over $404.74 M, making it one of the average sized ETFs attempting to match the performance of the Utilities - Broad segment of the equity market. RYU seeks to match the performance of the S&P 500 Equal Weight Telecommunication Services & Utilities Index before fees and expenses.
This index is an unmanaged equal weighted version of the S&P 500 Utilities Index that consists of common stocks of the following industries: electric utilities, gas utilities, multi-utilities & unregulated power & water utilities,telecommunication service companies, including fixed-line, cellular, wireless, high bandwidth & fiber-optic cable networks.
Costs
When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.
Annual operating expenses for this ETF are 0.40%, making it one of the cheaper products in the space.
It has a 12-month trailing dividend yield of 2.45%.
Sector Exposure and Top Holdings
ETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Utilities sector--about 100% of the portfolio.
Looking at individual holdings, Nextera Energy Inc (NEE - Free Report) accounts for about 3.72% of total assets, followed by Ppl Corp (PPL - Free Report) and Dominion Energy Inc (D - Free Report) .
The top 10 holdings account for about 36.49% of total assets under management.
Performance and Risk
The ETF return is roughly 22.33% so far this year and it's up approximately 18.92% in the last one year (as of 10/25/2019). In that past 52-week period, it has traded between $86.44 and $107.12.
The ETF has a beta of 0.23 and standard deviation of 12.74% for the trailing three-year period, making it a medium risk choice in the space. With about 28 holdings, it has more concentrated exposure than peers.
Alternatives
Invesco S&P 500 Equal Weight Utilities ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, RYU is a sufficient option for those seeking exposure to the Utilities/Infrastructure ETFs area of the market. Investors might also want to consider some other ETF options in the space.
Vanguard Utilities ETF (VPU - Free Report) tracks MSCI US Investable Market Utilities 25/50 Index and the Utilities Select Sector SPDR Fund (XLU - Free Report) tracks Utilities Select Sector Index. Vanguard Utilities ETF has $4.38 B in assets, Utilities Select Sector SPDR Fund has $11.56 B. VPU has an expense ratio of 0.10% and XLU charges 0.13%.
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.