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Is Invesco S&P 500 Equal Weight Health Care ETF (RSPH) a Strong ETF Right Now?
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The Invesco S&P 500 Equal Weight Health Care ETF (RSPH - Free Report) was launched on 11/01/2006, and is a smart beta exchange traded fund designed to offer broad exposure to the Health Care ETFs 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.
A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.
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.
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.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
Because the fund has amassed over $977.70 million, this makes it one of the larger ETFs in the Health Care ETFs. RSPH is managed by Invesco. RSPH seeks to match the performance of the S&P 500 EQUAL WEIGHT HEALTH CARE INDEX before fees and expenses.
The S&P 500 Equal Weight Health Care Index equally weights stocks in the health care sector of the S&P 500 Index.
Cost & Other Expenses
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.
Annual operating expenses for this ETF are 0.40%, making it one of the cheaper products in the space.
It's 12-month trailing dividend yield comes in at 0.66%.
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.
For RSPH, it has heaviest allocation in the Healthcare sector --about 100% of the portfolio.
Taking into account individual holdings, Illumina Inc (ILMN - Free Report) accounts for about 1.82% of the fund's total assets, followed by Align Technology Inc (ALGN - Free Report) and Catalent Inc (CTLT - Free Report) .
The top 10 holdings account for about 17.16% of total assets under management.
Performance and Risk
The ETF has gained about 1.14% so far this year and is up about 2.61% in the last one year (as of 01/16/2024). In the past 52-week period, it has traded between $25.30 and $30.58.
The ETF has a beta of 0.85 and standard deviation of 16.32% for the trailing three-year period. With about 66 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco S&P 500 Equal Weight Health Care ETF is a reasonable option for investors seeking to outperform the Health Care ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
Vanguard Health Care ETF (VHT - Free Report) tracks MSCI US Investable Market Health Care 25/50 Index and the Health Care Select Sector SPDR ETF (XLV - Free Report) tracks Health Care Select Sector Index. Vanguard Health Care ETF has $17.08 billion in assets, Health Care Select Sector SPDR ETF has $39.47 billion. VHT has an expense ratio of 0.10% and XLV 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 Health Care 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 Health Care ETF (RSPH) a Strong ETF Right Now?
The Invesco S&P 500 Equal Weight Health Care ETF (RSPH - Free Report) was launched on 11/01/2006, and is a smart beta exchange traded fund designed to offer broad exposure to the Health Care ETFs 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.
A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.
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.
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.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
Because the fund has amassed over $977.70 million, this makes it one of the larger ETFs in the Health Care ETFs. RSPH is managed by Invesco. RSPH seeks to match the performance of the S&P 500 EQUAL WEIGHT HEALTH CARE INDEX before fees and expenses.
The S&P 500 Equal Weight Health Care Index equally weights stocks in the health care sector of the S&P 500 Index.
Cost & Other Expenses
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.
Annual operating expenses for this ETF are 0.40%, making it one of the cheaper products in the space.
It's 12-month trailing dividend yield comes in at 0.66%.
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.
For RSPH, it has heaviest allocation in the Healthcare sector --about 100% of the portfolio.
Taking into account individual holdings, Illumina Inc (ILMN - Free Report) accounts for about 1.82% of the fund's total assets, followed by Align Technology Inc (ALGN - Free Report) and Catalent Inc (CTLT - Free Report) .
The top 10 holdings account for about 17.16% of total assets under management.
Performance and Risk
The ETF has gained about 1.14% so far this year and is up about 2.61% in the last one year (as of 01/16/2024). In the past 52-week period, it has traded between $25.30 and $30.58.
The ETF has a beta of 0.85 and standard deviation of 16.32% for the trailing three-year period. With about 66 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco S&P 500 Equal Weight Health Care ETF is a reasonable option for investors seeking to outperform the Health Care ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
Vanguard Health Care ETF (VHT - Free Report) tracks MSCI US Investable Market Health Care 25/50 Index and the Health Care Select Sector SPDR ETF (XLV - Free Report) tracks Health Care Select Sector Index. Vanguard Health Care ETF has $17.08 billion in assets, Health Care Select Sector SPDR ETF has $39.47 billion. VHT has an expense ratio of 0.10% and XLV 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 Health Care 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.