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Is Invesco S&P 500 Equal Weight Utilities ETF (RSPU) a Strong ETF Right Now?
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Launched on 11/01/2006, the Invesco S&P 500 Equal Weight Utilities ETF (RSPU - Free Report) is a smart beta exchange traded fund offering broad exposure to the Utilities/Infrastructure ETFs category of the market.
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.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
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.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other 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. RSPU has been able to amass assets over $284.45 million, making it one of the average sized ETFs in the Utilities/Infrastructure ETFs. RSPU seeks to match the performance of the SP 500 EQUAL WEIGHT TELECM-UTILITY INDEX before fees and expenses.
The S&P 500 Equal Weight Telecommunication Services & Utilities Index equally weights stocks found in the utilities and telecommunication services sectors 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.
Annual operating expenses for RSPU are 0.40%, which makes it one of the cheaper products in the space.
The fund has a 12-month trailing dividend yield of 2.57%.
Sector Exposure and Top Holdings
ETFs offer 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.
When you look at individual holdings, Alliant Energy Corp (LNT - Free Report) accounts for about 3.49% of the fund's total assets, followed by American Water Works Co Inc (AWK - Free Report) and Nisource Inc (NI - Free Report) .
The top 10 holdings account for about 33.85% of total assets under management.
Performance and Risk
Year-to-date, the Invesco S&P 500 Equal Weight Utilities ETF return is roughly 17.12% so far, and is up about 15.22% over the last 12 months (as of 08/02/2024). RSPU has traded between $48.19 and $63.21 in this past 52-week period.
The fund has a beta of 0.62 and standard deviation of 17.69% for the trailing three-year period. With about 32 holdings, it has more concentrated exposure than peers.
Alternatives
Invesco S&P 500 Equal Weight Utilities ETF is a reasonable option for investors seeking to outperform the Utilities/Infrastructure ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
Vanguard Utilities ETF (VPU - Free Report) tracks MSCI US Investable Market Utilities 25/50 Index and the Utilities Select Sector SPDR ETF (XLU - Free Report) tracks Utilities Select Sector Index. Vanguard Utilities ETF has $5.96 billion in assets, Utilities Select Sector SPDR ETF has $16.11 billion. VPU has an expense ratio of 0.10% and XLU 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 Utilities/Infrastructure 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 Utilities ETF (RSPU) a Strong ETF Right Now?
Launched on 11/01/2006, the Invesco S&P 500 Equal Weight Utilities ETF (RSPU - Free Report) is a smart beta exchange traded fund offering broad exposure to the Utilities/Infrastructure ETFs category of the market.
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.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
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.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other 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. RSPU has been able to amass assets over $284.45 million, making it one of the average sized ETFs in the Utilities/Infrastructure ETFs. RSPU seeks to match the performance of the SP 500 EQUAL WEIGHT TELECM-UTILITY INDEX before fees and expenses.
The S&P 500 Equal Weight Telecommunication Services & Utilities Index equally weights stocks found in the utilities and telecommunication services sectors 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.
Annual operating expenses for RSPU are 0.40%, which makes it one of the cheaper products in the space.
The fund has a 12-month trailing dividend yield of 2.57%.
Sector Exposure and Top Holdings
ETFs offer 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.
When you look at individual holdings, Alliant Energy Corp (LNT - Free Report) accounts for about 3.49% of the fund's total assets, followed by American Water Works Co Inc (AWK - Free Report) and Nisource Inc (NI - Free Report) .
The top 10 holdings account for about 33.85% of total assets under management.
Performance and Risk
Year-to-date, the Invesco S&P 500 Equal Weight Utilities ETF return is roughly 17.12% so far, and is up about 15.22% over the last 12 months (as of 08/02/2024). RSPU has traded between $48.19 and $63.21 in this past 52-week period.
The fund has a beta of 0.62 and standard deviation of 17.69% for the trailing three-year period. With about 32 holdings, it has more concentrated exposure than peers.
Alternatives
Invesco S&P 500 Equal Weight Utilities ETF is a reasonable option for investors seeking to outperform the Utilities/Infrastructure ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
Vanguard Utilities ETF (VPU - Free Report) tracks MSCI US Investable Market Utilities 25/50 Index and the Utilities Select Sector SPDR ETF (XLU - Free Report) tracks Utilities Select Sector Index. Vanguard Utilities ETF has $5.96 billion in assets, Utilities Select Sector SPDR ETF has $16.11 billion. VPU has an expense ratio of 0.10% and XLU 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 Utilities/Infrastructure 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.