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Is Invesco S&P 500 Equal Weight Materials ETF (RSPM) a Strong ETF Right Now?
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The Invesco S&P 500 Equal Weight Materials ETF (RSPM - Free Report) made its debut on 11/01/2006, and is a smart beta exchange traded fund that provides 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 offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.
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.
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.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
Because the fund has amassed over $283.39 million, this makes it one of the average sized ETFs in the Materials ETFs. RSPM is managed by Invesco. RSPM, before fees and expenses, 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 this ETF, which makes it one of the cheaper products in the space.
It has a 12-month trailing dividend yield of 1.84%.
Sector Exposure and Top Holdings
Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.
This ETF has heaviest allocation in the Materials sector - about 100% of the portfolio.
Looking at individual holdings, Newmont Corp (NEM - Free Report) accounts for about 4.49% of total assets, followed by Sherwin-Williams Co/the (SHW - Free Report) and Fmc Corp (FMC - Free Report) .
The top 10 holdings account for about 39.66% of total assets under management.
Performance and Risk
Year-to-date, the Invesco S&P 500 Equal Weight Materials ETF return is roughly 11.11% so far, and it's up approximately 22.07% over the last 12 months (as of 09/25/2024). RSPM has traded between $28.92 and $36.88 in this past 52-week period.
RSPM has a beta of 1.10 and standard deviation of 20.11% 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 $5.58 billion in assets, FlexShares Morningstar Global Upstream Natural Resources ETF has $5.61 billion. XLB has an expense ratio of 0.09% 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?
The Invesco S&P 500 Equal Weight Materials ETF (RSPM - Free Report) made its debut on 11/01/2006, and is a smart beta exchange traded fund that provides 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 offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.
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.
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.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
Because the fund has amassed over $283.39 million, this makes it one of the average sized ETFs in the Materials ETFs. RSPM is managed by Invesco. RSPM, before fees and expenses, 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 this ETF, which makes it one of the cheaper products in the space.
It has a 12-month trailing dividend yield of 1.84%.
Sector Exposure and Top Holdings
Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.
This ETF has heaviest allocation in the Materials sector - about 100% of the portfolio.
Looking at individual holdings, Newmont Corp (NEM - Free Report) accounts for about 4.49% of total assets, followed by Sherwin-Williams Co/the (SHW - Free Report) and Fmc Corp (FMC - Free Report) .
The top 10 holdings account for about 39.66% of total assets under management.
Performance and Risk
Year-to-date, the Invesco S&P 500 Equal Weight Materials ETF return is roughly 11.11% so far, and it's up approximately 22.07% over the last 12 months (as of 09/25/2024). RSPM has traded between $28.92 and $36.88 in this past 52-week period.
RSPM has a beta of 1.10 and standard deviation of 20.11% 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 $5.58 billion in assets, FlexShares Morningstar Global Upstream Natural Resources ETF has $5.61 billion. XLB has an expense ratio of 0.09% 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.