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 500 Equal Weight Energy ETF (RSPG) a Strong ETF Right Now?
Read MoreHide Full Article
A smart beta exchange traded fund, the Invesco S&P 500 Equal Weight Energy ETF (RSPG - Free Report) debuted on 11/01/2006, and offers broad exposure to the Energy 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.
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.
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.
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
The fund is sponsored by Invesco. It has amassed assets over $512.62 million, making it one of the larger ETFs in the Energy ETFs. This particular fund, before fees and expenses, seeks to match the performance of the S&P 500 EQUAL WEIGHT ENERGY PLUS INDEX .
The S&P 500 Equal Weight Energy Plus Index equally weights stocks in the energy 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 RSPG, making it one of the cheaper products in the space.
The fund has a 12-month trailing dividend yield of 2.69%.
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 100% of the portfolio, the fund has heaviest allocation to the Energy sector.
Taking into account individual holdings, Baker Hughes Co (BKR - Free Report) accounts for about 5.16% of the fund's total assets, followed by Targa Resources Corp (TRGP - Free Report) and Exxon Mobil Corp (XOM - Free Report) .
RSPG's top 10 holdings account for about 48.19% of its total assets under management.
Performance and Risk
The ETF return is roughly 2.33% and is down about -3.31% so far this year and in the past one year (as of 09/11/2024), respectively. RSPG has traded between $69.70 and $86.08 during this last 52-week period.
RSPG has a beta of 1.41 and standard deviation of 18.50% for the trailing three-year period. With about 23 holdings, it has more concentrated exposure than peers.
Alternatives
Invesco S&P 500 Equal Weight Energy ETF is an excellent option for investors seeking to outperform the Energy ETFs segment of the market. There are other ETFs in the space which investors could consider as well.
Vanguard Energy ETF (VDE - Free Report) tracks MSCI US Investable Market Energy 25/50 Index and the Energy Select Sector SPDR ETF (XLE - Free Report) tracks Energy Select Sector Index. Vanguard Energy ETF has $7.73 billion in assets, Energy Select Sector SPDR ETF has $34.27 billion. VDE has an expense ratio of 0.10% and XLE 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 Energy 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.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Is Invesco S&P 500 Equal Weight Energy ETF (RSPG) a Strong ETF Right Now?
A smart beta exchange traded fund, the Invesco S&P 500 Equal Weight Energy ETF (RSPG - Free Report) debuted on 11/01/2006, and offers broad exposure to the Energy 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.
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.
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.
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
The fund is sponsored by Invesco. It has amassed assets over $512.62 million, making it one of the larger ETFs in the Energy ETFs. This particular fund, before fees and expenses, seeks to match the performance of the S&P 500 EQUAL WEIGHT ENERGY PLUS INDEX .
The S&P 500 Equal Weight Energy Plus Index equally weights stocks in the energy 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 RSPG, making it one of the cheaper products in the space.
The fund has a 12-month trailing dividend yield of 2.69%.
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 100% of the portfolio, the fund has heaviest allocation to the Energy sector.
Taking into account individual holdings, Baker Hughes Co (BKR - Free Report) accounts for about 5.16% of the fund's total assets, followed by Targa Resources Corp (TRGP - Free Report) and Exxon Mobil Corp (XOM - Free Report) .
RSPG's top 10 holdings account for about 48.19% of its total assets under management.
Performance and Risk
The ETF return is roughly 2.33% and is down about -3.31% so far this year and in the past one year (as of 09/11/2024), respectively. RSPG has traded between $69.70 and $86.08 during this last 52-week period.
RSPG has a beta of 1.41 and standard deviation of 18.50% for the trailing three-year period. With about 23 holdings, it has more concentrated exposure than peers.
Alternatives
Invesco S&P 500 Equal Weight Energy ETF is an excellent option for investors seeking to outperform the Energy ETFs segment of the market. There are other ETFs in the space which investors could consider as well.
Vanguard Energy ETF (VDE - Free Report) tracks MSCI US Investable Market Energy 25/50 Index and the Energy Select Sector SPDR ETF (XLE - Free Report) tracks Energy Select Sector Index. Vanguard Energy ETF has $7.73 billion in assets, Energy Select Sector SPDR ETF has $34.27 billion. VDE has an expense ratio of 0.10% and XLE 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 Energy 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.