Is Invesco S&P 500 Equal Weight Financials ETF (RSPF) a Strong ETF Right Now?
The Invesco S&P 500 Equal Weight Financials ETF (RSPF) made its debut on 11/01/2006, and is a smart beta exchange traded fund that provides broad exposure to the Financials 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.
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.
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.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
The fund is managed by Invesco. RSPF has been able to amass assets over $265.67 million, making it one of the average sized ETFs in the Financials ETFs. Before fees and expenses, RSPF seeks to match the performance of the S&P 500 EQUAL WEIGHT FINANCIALS INDEX .
The S&P 500 Equal Weight Financials Index equally weights stocks in the financial sector of the S&P 500 Index.
Cost & Other Expenses
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
Annual operating expenses for RSPF are 0.40%, which makes it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 2.02%.
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.
RSPF's heaviest allocation is in the Financials sector, which is about 100% of the portfolio.
Taking into account individual holdings, Allstate Corp/the (ALL) accounts for about 1.51% of the fund's total assets, followed by Paypal Holdings Inc (PYPL) and Citigroup Inc (C).
Its top 10 holdings account for approximately 14.77% of RSPF's total assets under management.
Performance and Risk
So far this year, RSPF has added about 6.60%, and was up about 0% in the last one year (as of 05/28/2024). During this past 52-week period, the fund has traded between $48.10 and $64.24.
The fund has a beta of 1.07. With about 73 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco S&P 500 Equal Weight Financials ETF is an excellent option for investors seeking to outperform the Financials ETFs segment of the market. There are other ETFs in the space which investors could consider as well.
Vanguard Financials ETF (VFH) tracks MSCI US Investable Market Financials 25/50 Index and the Financial Select Sector SPDR ETF (XLF) tracks Financial Select Sector Index. Vanguard Financials ETF has $9.26 billion in assets, Financial Select Sector SPDR ETF has $39.30 billion. VFH has an expense ratio of 0.10% and XLF 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 Financials 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 Financials ETF (RSPF): ETF Research Reports
Citigroup Inc. (C) : Free Stock Analysis Report
The Allstate Corporation (ALL) : Free Stock Analysis Report
Financial Select Sector SPDR ETF (XLF): ETF Research Reports
PayPal Holdings, Inc. (PYPL) : Free Stock Analysis Report
Vanguard Financials ETF (VFH): ETF Research Reports
