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Is Invesco Russell 1000 Equal Weight ETF (EQAL) a Strong ETF Right Now?
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The Invesco Russell 1000 Equal Weight ETF (EQAL - Free Report) made its debut on 12/23/2014, and is a smart beta exchange traded fund that provides broad exposure to the Style Box - Large Cap Blend category of the market.
What Are Smart Beta ETFs?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
Managed by Invesco, EQAL has amassed assets over $596.32 million, making it one of the larger ETFs in the Style Box - Large Cap Blend. Before fees and expenses, this particular fund 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
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
With on par with most peer products in the space, this ETF has annual operating expenses of 0.20%.
It's 12-month trailing dividend yield comes in at 1.90%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
Representing 12.50% of the portfolio, the fund has heaviest allocation to the Information Technology sector; Financials and Industrials round out the top three.
Taking into account individual holdings, Frontier Communications Parent Inc (FYBR - Free Report) accounts for about 0.54% of the fund's total assets, followed by Charter Communications Inc (CHTR - Free Report) and Liberty Broadband Corp (LBRDK - Free Report) .
Its top 10 holdings account for approximately 5.13% of EQAL's total assets under management.
Performance and Risk
The ETF has added roughly 3.33% and was up about 0.40% so far this year and in the past one year (as of 11/30/2023), respectively. EQAL has traded between $37.43 and $44.80 during this last 52-week period.
The fund has a beta of 1.12 and standard deviation of 18.42% for the trailing three-year period, which makes EQAL a medium risk choice in this particular space. With about 997 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 $375.05 billion in assets, SPDR S&P 500 ETF has $427.32 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?
The Invesco Russell 1000 Equal Weight ETF (EQAL - Free Report) made its debut on 12/23/2014, and is a smart beta exchange traded fund that provides broad exposure to the Style Box - Large Cap Blend category of the market.
What Are Smart Beta ETFs?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
Managed by Invesco, EQAL has amassed assets over $596.32 million, making it one of the larger ETFs in the Style Box - Large Cap Blend. Before fees and expenses, this particular fund 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
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
With on par with most peer products in the space, this ETF has annual operating expenses of 0.20%.
It's 12-month trailing dividend yield comes in at 1.90%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
Representing 12.50% of the portfolio, the fund has heaviest allocation to the Information Technology sector; Financials and Industrials round out the top three.
Taking into account individual holdings, Frontier Communications Parent Inc (FYBR - Free Report) accounts for about 0.54% of the fund's total assets, followed by Charter Communications Inc (CHTR - Free Report) and Liberty Broadband Corp (LBRDK - Free Report) .
Its top 10 holdings account for approximately 5.13% of EQAL's total assets under management.
Performance and Risk
The ETF has added roughly 3.33% and was up about 0.40% so far this year and in the past one year (as of 11/30/2023), respectively. EQAL has traded between $37.43 and $44.80 during this last 52-week period.
The fund has a beta of 1.12 and standard deviation of 18.42% for the trailing three-year period, which makes EQAL a medium risk choice in this particular space. With about 997 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 $375.05 billion in assets, SPDR S&P 500 ETF has $427.32 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.