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Is Invesco S&P 500 Equal Weight Industrials ETF (RSPN) a Strong ETF Right Now?
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Designed to provide broad exposure to the Industrials ETFs category of the market, the Invesco S&P 500 Equal Weight Industrials ETF (RSPN - Free Report) is a smart beta exchange traded fund launched on 11/01/2006.
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.
Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option 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.
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.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
RSPN is managed by Invesco, and this fund has amassed over $561.56 million, which makes it one of the average sized ETFs in the Industrials ETFs. RSPN seeks to match the performance of the S&P 500 EQUAL WEIGHT INDUSTRIALS INDEX before fees and expenses.
The S&P 500 Equal Weight Industrials Index equally weights stocks in the industrials sector of the S&P 500 Index.
Cost & Other Expenses
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
Operating expenses on an annual basis are 0.40% for this ETF, which makes it one of the cheaper products in the space.
It has a 12-month trailing dividend yield of 1.06%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Industrials sector - about 100% of the portfolio.
When you look at individual holdings, Old Dominion Freight Line Inc (ODFL - Free Report) accounts for about 1.70% of the fund's total assets, followed by Carrier Global Corp (CARR - Free Report) and Eaton Corp Plc (ETN - Free Report) .
Its top 10 holdings account for approximately 15.17% of RSPN's total assets under management.
Performance and Risk
The ETF has gained about 15.84% and was up about 22.15% so far this year and in the past one year (as of 09/05/2023), respectively. RSPN has traded between $30.98 and $41.91 during this last 52-week period.
The ETF has a beta of 1.17 and standard deviation of 19.32% for the trailing three-year period. With about 76 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco S&P 500 Equal Weight Industrials ETF is a reasonable option for investors seeking to outperform the Industrials ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
Vanguard Industrials ETF (VIS - Free Report) tracks MSCI US Investable Market Industrials 25/50 Index and the Industrial Select Sector SPDR ETF (XLI - Free Report) tracks Industrial Select Sector Index. Vanguard Industrials ETF has $4.51 billion in assets, Industrial Select Sector SPDR ETF has $15.67 billion. VIS has an expense ratio of 0.10% and XLI charges 0.10%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Industrials 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 Industrials ETF (RSPN) a Strong ETF Right Now?
Designed to provide broad exposure to the Industrials ETFs category of the market, the Invesco S&P 500 Equal Weight Industrials ETF (RSPN - Free Report) is a smart beta exchange traded fund launched on 11/01/2006.
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.
Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option 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.
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.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
RSPN is managed by Invesco, and this fund has amassed over $561.56 million, which makes it one of the average sized ETFs in the Industrials ETFs. RSPN seeks to match the performance of the S&P 500 EQUAL WEIGHT INDUSTRIALS INDEX before fees and expenses.
The S&P 500 Equal Weight Industrials Index equally weights stocks in the industrials sector of the S&P 500 Index.
Cost & Other Expenses
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
Operating expenses on an annual basis are 0.40% for this ETF, which makes it one of the cheaper products in the space.
It has a 12-month trailing dividend yield of 1.06%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Industrials sector - about 100% of the portfolio.
When you look at individual holdings, Old Dominion Freight Line Inc (ODFL - Free Report) accounts for about 1.70% of the fund's total assets, followed by Carrier Global Corp (CARR - Free Report) and Eaton Corp Plc (ETN - Free Report) .
Its top 10 holdings account for approximately 15.17% of RSPN's total assets under management.
Performance and Risk
The ETF has gained about 15.84% and was up about 22.15% so far this year and in the past one year (as of 09/05/2023), respectively. RSPN has traded between $30.98 and $41.91 during this last 52-week period.
The ETF has a beta of 1.17 and standard deviation of 19.32% for the trailing three-year period. With about 76 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco S&P 500 Equal Weight Industrials ETF is a reasonable option for investors seeking to outperform the Industrials ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
Vanguard Industrials ETF (VIS - Free Report) tracks MSCI US Investable Market Industrials 25/50 Index and the Industrial Select Sector SPDR ETF (XLI - Free Report) tracks Industrial Select Sector Index. Vanguard Industrials ETF has $4.51 billion in assets, Industrial Select Sector SPDR ETF has $15.67 billion. VIS has an expense ratio of 0.10% and XLI charges 0.10%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Industrials 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.