Should You Invest in the Invesco S&P 500 Equal Weight Industrials ETF (RGI)?
Looking for broad exposure to the Industrials - Broad segment of the equity market? You should consider the Invesco S&P 500 Equal Weight Industrials ETF (RGI), 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 also provide investors access to a broad group of companies in particular sectors that offer low risk and diversified exposure. Industrials - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 5, placing it in top 31%.
Index Details
The fund is sponsored by Invesco. It has amassed assets over $607.32 million, making it one of the average sized ETFs attempting to match the performance of the Industrials - Broad segment of the equity market. RGI seeks to match the performance of the S&P 500 Equal Weight Industrials Index before fees and expenses.
This index is an unmanaged equal weighted version of the S&P 500 Industrials Index that consists of the common stocks of the following industries: aerospace & defense, building products, construction & engineering, electrical equipment, conglomerates, machinery; commercial services & supplies, air freight & logistics, airlines, marine, road & rail transportation infrastructure.
Costs
When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.
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 0.74%.
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.
This ETF has heaviest allocation in the Industrials sector--about 100% of the portfolio.
Looking at individual holdings, Kansas City Southern (KSU) accounts for about 1.56% of total assets, followed by Lockheed Martin Corp (LMT) and An O Smith Corp (AOS).
The top 10 holdings account for about 14.22% of total assets under management.
Performance and Risk
The ETF has added roughly 21.01% so far this year and it's up approximately 55.79% in the last one year (as of 06/23/2021). In that past 52-week period, it has traded between $115.23 and $191.68.
The ETF has a beta of 1.25 and standard deviation of 26.67% for the trailing three-year period, making it a medium risk choice in the space. With about 75 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco S&P 500 Equal Weight Industrials ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, RGI is a sufficient option for those seeking exposure to the Industrials ETFs area of the market. Investors might also want to consider some other ETF options in the space.
Vanguard Industrials ETF (VIS) tracks MSCI US Investable Market Industrials 25/50 Index and the Industrial Select Sector SPDR ETF (XLI) tracks Industrial Select Sector Index. Vanguard Industrials ETF has $5.48 billion in assets, Industrial Select Sector SPDR ETF has $19.62 billion. VIS has an expense ratio of 0.10% and XLI charges 0.12%.
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 Industrials ETF (RGI): ETF Research Reports
Lockheed Martin Corporation (LMT) : Free Stock Analysis Report
Kansas City Southern (KSU) : Free Stock Analysis Report
A. O. Smith Corporation (AOS) : Free Stock Analysis Report
Vanguard Industrials ETF (VIS): ETF Research Reports
Industrial Select Sector SPDR ETF (XLI): ETF Research Reports
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