We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Is Invesco S&P 100 Equal Weight ETF (EQWL) a Strong ETF Right Now?
Read MoreHide Full Article
Launched on 12/01/2006, the Invesco S&P 100 Equal Weight ETF (EQWL - Free Report) is a smart beta exchange traded fund offering broad exposure to the Style Box - Large Cap Blend 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.
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.
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.
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
EQWL is managed by Invesco, and this fund has amassed over $767.45 million, which makes it one of the average sized ETFs in the Style Box - Large Cap Blend. Before fees and expenses, EQWL seeks to match the performance of the Russell Top 200 Equal Weight Index.
The S&P 100 Equal Weight Index is designed to provide equal-weighted exposure to the securities of the largest 200 companies in the US equity market.
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.
Annual operating expenses for EQWL are 0.25%, which makes it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 1.83%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Financials sector - about 18.40% of the portfolio. Healthcare and Information Technology round out the top three.
Taking into account individual holdings, Charter Communications Inc (CHTR - Free Report) accounts for about 1.32% of the fund's total assets, followed by 3m Co (MMM - Free Report) and Lockheed Martin Corp (LMT - Free Report) .
The top 10 holdings account for about 11.75% of total assets under management.
Performance and Risk
The ETF has added about 14.91% so far this year and is up about 22.76% in the last one year (as of 09/05/2024). In the past 52-week period, it has traded between $74.98 and $100.85.
The fund has a beta of 0.97 and standard deviation of 15.58% for the trailing three-year period, which makes EQWL a medium risk choice in this particular space. With about 102 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco S&P 100 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 $509.82 billion in assets, SPDR S&P 500 ETF has $553.51 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.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Is Invesco S&P 100 Equal Weight ETF (EQWL) a Strong ETF Right Now?
Launched on 12/01/2006, the Invesco S&P 100 Equal Weight ETF (EQWL - Free Report) is a smart beta exchange traded fund offering broad exposure to the Style Box - Large Cap Blend 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.
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.
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.
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
EQWL is managed by Invesco, and this fund has amassed over $767.45 million, which makes it one of the average sized ETFs in the Style Box - Large Cap Blend. Before fees and expenses, EQWL seeks to match the performance of the Russell Top 200 Equal Weight Index.
The S&P 100 Equal Weight Index is designed to provide equal-weighted exposure to the securities of the largest 200 companies in the US equity market.
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.
Annual operating expenses for EQWL are 0.25%, which makes it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 1.83%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Financials sector - about 18.40% of the portfolio. Healthcare and Information Technology round out the top three.
Taking into account individual holdings, Charter Communications Inc (CHTR - Free Report) accounts for about 1.32% of the fund's total assets, followed by 3m Co (MMM - Free Report) and Lockheed Martin Corp (LMT - Free Report) .
The top 10 holdings account for about 11.75% of total assets under management.
Performance and Risk
The ETF has added about 14.91% so far this year and is up about 22.76% in the last one year (as of 09/05/2024). In the past 52-week period, it has traded between $74.98 and $100.85.
The fund has a beta of 0.97 and standard deviation of 15.58% for the trailing three-year period, which makes EQWL a medium risk choice in this particular space. With about 102 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco S&P 100 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 $509.82 billion in assets, SPDR S&P 500 ETF has $553.51 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.