Should You Invest in the Invesco S&P 500 Equal Weight Technology ETF (RSPT)?

Zacks Equity Research

9 July 2024 at 6:20 am·3-min read

Designed to provide broad exposure to the Technology - Broad segment of the equity market, the Invesco S&P 500 Equal Weight Technology ETF (RSPT) is a passively managed exchange traded fund launched on 11/01/2006.

An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also excellent vehicles for long term investors.

Sector ETFs are also funds of convenience, offering many ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. Technology - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 12, placing it in bottom 25%.

Index Details

The fund is sponsored by Invesco. It has amassed assets over $4.16 billion, making it one of the larger ETFs attempting to match the performance of the Technology - Broad segment of the equity market. RSPT seeks to match the performance of the S&P 500 EQUAL WEIGHT INFO TECH INDEX before fees and expenses.

The S&P 500 Equal Weight Information Technology Index equally weights stocks in the information technology sector of the S&P 500 Index.

Costs

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.

It has a 12-month trailing dividend yield of 0.47%.

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.

This ETF has heaviest allocation in the Information Technology sector--about 100% of the portfolio.

Looking at individual holdings, First Solar Inc (FSLR) accounts for about 2.36% of total assets, followed by Micron Technology Inc (MU) and Nvidia Corp (NVDA).

The top 10 holdings account for about 20.33% of total assets under management.

Performance and Risk

So far this year, RSPT has added about 15.12%, and it's up approximately 30.34% in the last one year (as of 07/09/2024). During this past 52-week period, the fund has traded between $26.28 and $37.49.

The ETF has a beta of 1.17 and standard deviation of 23.40% for the trailing three-year period. With about 67 holdings, it effectively diversifies company-specific risk.

Alternatives

Invesco S&P 500 Equal Weight Technology ETF holds a Zacks ETF Rank of 1 (Strong Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, RSPT is an excellent option for investors seeking exposure to the Technology ETFs segment of the market. There are other additional ETFs in the space that 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 $72.90 billion in assets, Vanguard Information Technology ETF has $77.40 billion. XLK has an expense ratio of 0.09% and VGT charges 0.10%.

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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