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Is Invesco S&P 500 Equal Weight Materials ETF (RSPM) a Strong ETF Right Now?
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Making its debut on 11/01/2006, smart beta exchange traded fund Invesco S&P 500 Equal Weight Materials ETF (RSPM - Free Report) provides investors broad exposure to the Materials ETFs category of the market.
What Are Smart Beta ETFs?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
The fund is managed by Invesco. RSPM has been able to amass assets over $278.66 million, making it one of the average sized ETFs in the Materials ETFs. Before fees and expenses, this particular fund seeks to match the performance of the S&P 500 EQUAL WEIGHT MATERIALS INDEX .
The S&P 500 Equal Weight Materials Index equally weights stocks in the materials sector of the S&P 500 Index.
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.
Operating expenses on an annual basis are 0.40% for RSPM, making it one of the cheaper products in the space.
It has a 12-month trailing dividend yield of 2.15%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Materials sector - about 100% of the portfolio.
When you look at individual holdings, Albemarle Corp (ALB - Free Report) accounts for about 3.93% of the fund's total assets, followed by Freeport-Mcmoran Inc (FCX - Free Report) and Nucor Corp (NUE - Free Report) .
Its top 10 holdings account for approximately 36.83% of RSPM's total assets under management.
Performance and Risk
The ETF has lost about -4.78% and is down about -3.25% so far this year and in the past one year (as of 01/19/2024), respectively. RSPM has traded between $28.92 and $35.46 during this last 52-week period.
The ETF has a beta of 1.12 and standard deviation of 20.83% for the trailing three-year period. With about 29 holdings, it has more concentrated exposure than peers.
Alternatives
Invesco S&P 500 Equal Weight Materials ETF is a reasonable option for investors seeking to outperform the Materials ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
Materials Select Sector SPDR ETF (XLB - Free Report) tracks Materials Select Sector Index and the FlexShares Morningstar Global Upstream Natural Resources ETF (GUNR - Free Report) tracks Morningstar Global Upstream Natural Resources Index. Materials Select Sector SPDR ETF has $5.53 billion in assets, FlexShares Morningstar Global Upstream Natural Resources ETF has $6.35 billion. XLB has an expense ratio of 0.10% and GUNR charges 0.46%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Materials 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 Materials ETF (RSPM) a Strong ETF Right Now?
Making its debut on 11/01/2006, smart beta exchange traded fund Invesco S&P 500 Equal Weight Materials ETF (RSPM - Free Report) provides investors broad exposure to the Materials ETFs category of the market.
What Are Smart Beta ETFs?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
The fund is managed by Invesco. RSPM has been able to amass assets over $278.66 million, making it one of the average sized ETFs in the Materials ETFs. Before fees and expenses, this particular fund seeks to match the performance of the S&P 500 EQUAL WEIGHT MATERIALS INDEX .
The S&P 500 Equal Weight Materials Index equally weights stocks in the materials sector of the S&P 500 Index.
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.
Operating expenses on an annual basis are 0.40% for RSPM, making it one of the cheaper products in the space.
It has a 12-month trailing dividend yield of 2.15%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Materials sector - about 100% of the portfolio.
When you look at individual holdings, Albemarle Corp (ALB - Free Report) accounts for about 3.93% of the fund's total assets, followed by Freeport-Mcmoran Inc (FCX - Free Report) and Nucor Corp (NUE - Free Report) .
Its top 10 holdings account for approximately 36.83% of RSPM's total assets under management.
Performance and Risk
The ETF has lost about -4.78% and is down about -3.25% so far this year and in the past one year (as of 01/19/2024), respectively. RSPM has traded between $28.92 and $35.46 during this last 52-week period.
The ETF has a beta of 1.12 and standard deviation of 20.83% for the trailing three-year period. With about 29 holdings, it has more concentrated exposure than peers.
Alternatives
Invesco S&P 500 Equal Weight Materials ETF is a reasonable option for investors seeking to outperform the Materials ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
Materials Select Sector SPDR ETF (XLB - Free Report) tracks Materials Select Sector Index and the FlexShares Morningstar Global Upstream Natural Resources ETF (GUNR - Free Report) tracks Morningstar Global Upstream Natural Resources Index. Materials Select Sector SPDR ETF has $5.53 billion in assets, FlexShares Morningstar Global Upstream Natural Resources ETF has $6.35 billion. XLB has an expense ratio of 0.10% and GUNR charges 0.46%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Materials 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.