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Is Invesco S&P 500 Equal Weight Utilities ETF (RSPU) a Strong ETF Right Now?
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Designed to provide broad exposure to the Utilities/Infrastructure ETFs category of the market, the Invesco S&P 500 Equal Weight Utilities ETF (RSPU - Free Report) is a smart beta exchange traded fund launched on 11/01/2006.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
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.
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.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.
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
The fund is managed by Invesco. RSPU has been able to amass assets over $348.18 million, making it one of the average sized ETFs in the Utilities/Infrastructure ETFs. Before fees and expenses, this particular fund seeks to match the performance of the SP 500 EQUAL WEIGHT TELECM-UTILITY INDEX.
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
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 this ETF are 0.40%, making it one of the cheaper products in the space.
RSPU's 12-month trailing dividend yield is 2.33%.
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 Utilities sector - about 100% of the portfolio.
Looking at individual holdings, Edison International (EIX - Free Report) accounts for about 3.50% of total assets, followed by Ameren Corp (AEE - Free Report) and Wec Energy Group Inc (WEC - Free Report) .
Its top 10 holdings account for approximately 34.28% of RSPU's total assets under management.
Performance and Risk
The ETF return is roughly 28.92% so far this year and was up about 40.79% in the last one year (as of 10/02/2024). In the past 52-week period, it has traded between $48.67 and $69.19.
RSPU has a beta of 0.63 and standard deviation of 17.72% for the trailing three-year period. With about 33 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 $6.75 billion in assets, Utilities Select Sector SPDR ETF has $18.49 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?
Designed to provide broad exposure to the Utilities/Infrastructure ETFs category of the market, the Invesco S&P 500 Equal Weight Utilities ETF (RSPU - Free Report) is a smart beta exchange traded fund launched on 11/01/2006.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
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.
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.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.
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
The fund is managed by Invesco. RSPU has been able to amass assets over $348.18 million, making it one of the average sized ETFs in the Utilities/Infrastructure ETFs. Before fees and expenses, this particular fund seeks to match the performance of the SP 500 EQUAL WEIGHT TELECM-UTILITY INDEX.
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
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 this ETF are 0.40%, making it one of the cheaper products in the space.
RSPU's 12-month trailing dividend yield is 2.33%.
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 Utilities sector - about 100% of the portfolio.
Looking at individual holdings, Edison International (EIX - Free Report) accounts for about 3.50% of total assets, followed by Ameren Corp (AEE - Free Report) and Wec Energy Group Inc (WEC - Free Report) .
Its top 10 holdings account for approximately 34.28% of RSPU's total assets under management.
Performance and Risk
The ETF return is roughly 28.92% so far this year and was up about 40.79% in the last one year (as of 10/02/2024). In the past 52-week period, it has traded between $48.67 and $69.19.
RSPU has a beta of 0.63 and standard deviation of 17.72% for the trailing three-year period. With about 33 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 $6.75 billion in assets, Utilities Select Sector SPDR ETF has $18.49 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.