Is Invesco S&P 500 Equal Weight Technology ETF (RSPT) a Strong ETF Right Now?
A smart beta exchange traded fund, the Invesco S&P 500 Equal Weight Technology ETF (RSPT) debuted on 11/01/2006, and offers broad exposure to the Technology ETFs category of the market.
What Are Smart Beta ETFs?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader 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.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
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
The fund is managed by Invesco. RSPT has been able to amass assets over $2.98 billion, making it one of the larger ETFs in the Technology ETFs. Before fees and expenses, this particular fund seeks to match the performance of the S&P 500 EQUAL WEIGHT INFO TECH INDEX .
The S&P 500 Equal Weight Information Technology Index equally weights stocks in the information technology sector 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.
With one of the cheaper products in the space, this ETF has annual operating expenses of 0.40%.
The fund has a 12-month trailing dividend yield of 0.65%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, 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 Information Technology sector.
When you look at individual holdings, Intuit Inc (INTU) accounts for about 1.82% of the fund's total assets, followed by Cdw Corp/de (CDW) and Nvidia Corp (NVDA).
The top 10 holdings account for about 17.44% of total assets under management.
Performance and Risk
Year-to-date, the Invesco S&P 500 Equal Weight Technology ETF has gained about 18.72% so far, and is up about 16.93% over the last 12 months (as of 09/20/2023). RSPT has traded between $22.01 and $30.45 in this past 52-week period.
The fund has a beta of 1.17 and standard deviation of 23.97% for the trailing three-year period. With about 66 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco S&P 500 Equal Weight Technology ETF is an excellent option for investors seeking to outperform the Technology ETFs segment of the market. There are other ETFs in the space which investors could consider as well.
Technology Select Sector SPDR ETF (XLK) tracks Technology Select Sector Index and the Vanguard Information Technology ETF (VGT) tracks MSCI US Investable Market Information Technology 25/50 Index. Technology Select Sector SPDR ETF has $48.97 billion in assets, Vanguard Information Technology ETF has $51.54 billion. XLK has an expense ratio of 0.10% and VGT charges 0.10%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Technology 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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Invesco S&P 500 Equal Weight Technology ETF (RSPT): ETF Research Reports
NVIDIA Corporation (NVDA) : Free Stock Analysis Report
Intuit Inc. (INTU) : Free Stock Analysis Report
Technology Select Sector SPDR ETF (XLK): ETF Research Reports
CDW Corporation (CDW) : Free Stock Analysis Report
Vanguard Information Technology ETF (VGT): ETF Research Reports
