Should You Invest in the Invesco S&P 500 Equal Weight Financials ETF?

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

Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are 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. Financials - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 2, placing it in top 13%.

Index Details

The fund is sponsored by Invesco. It has amassed assets over $271.83 million, making it one of the average sized ETFs attempting to match the performance of the Financials - Broad segment of the equity market. RSPF seeks to match the performance of the S&P 500 EQUAL WEIGHT FINANCIALS INDEX before fees and expenses.

The S&P 500 Equal Weight Financials Index equally weights stocks in the financial sector of the S&P 500 Index.

Costs

Expense ratios are an important factor in the return of an ETF and in the long term, cheaper funds can significantly outperform their more expensive counterparts, other things remaining the same.

Annual operating expenses for this ETF are 0.40%, making it on par with most peer products in the space.

It has a 12-month trailing dividend yield of 1.41%.

Sector Exposure and Top Holdings

ETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.

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

Looking at individual holdings, Cboe Global Markets Inc CBOE accounts for about 1.60% of total assets, followed by Truist Financial Corp TFC and Globe Life Inc GL.

The top 10 holdings account for about 15.42% of total assets under management.

Performance and Risk

So far this year, RSPF has gained about 14.40%, and is up about 29.31% in the last one year (as of 09/12/2024). During this past 52-week period, the fund has traded between $48.10 and $68.77.

The ETF has a beta of 1.05 and standard deviation of 13.82% for the trailing three-year period. With about 72 holdings, it effectively diversifies company-specific risk.

Alternatives

Invesco S&P 500 Equal Weight Financials ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, RSPF is a great option for investors seeking exposure to the Financials ETFs segment of the market. There are other additional ETFs in the space that 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 $9.80 billion in assets, Financial Select Sector SPDR ETF has $43.50 billion. VFH has an expense ratio of 0.10% and XLF charges 0.09%.

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