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Should You Invest in the Guggenheim S&P 500 Equal Weight Industrials ETF (RGI)?


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The Guggenheim S&P 500 Equal Weight Industrials ETF (RGI) was launched on 11/01/2006, and is a passively managed exchange traded fund designed to offer broad exposure to the Industrials - Broad segment of the U.S. equity market.

Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.

Investor-friendly, sector ETFs provide many options to gain low risk and diversified exposure to a broad group of companies in particular sectors. Industrials - 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 Powershares. It has amassed assets over $305.12 M, making it one of the average sized ETFs attempting to match the performance of the Industrials - Broad segment of the U.S. 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

Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are 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 1.18%.

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 Industrials sector--about 100% of the portfolio.

Looking at individual holdings, Transdigm Group Inc (TDG) accounts for about 1.71% of total assets, followed by Textron Inc (TXT) and Csx Corp (CSX).

The top 10 holdings account for about 15.84% of total assets under management.

Performance and Risk

So far this year, RGI has lost about -0.55%, and is up roughly 14.62% in the last one year (as of 05/25/2018). During this past 52-week period, the fund has traded between $105.03 and $127.83.

The ETF has a beta of 1.10 and standard deviation of 14.91% for the trailing three-year period, making it a medium risk choice in the space. With about 70 holdings, it effectively diversifies company-specific risk.

Alternatives

Guggenheim S&P 500 Equal Weight Industrials 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, RGI is an outstanding option for investors seeking exposure to the Industrials ETFs segment of the market. There are other additional ETFs in the space that investors could consider as well.

Vanguard Industrials ETF (VIS) tracks MSCI US Investable Market Industrials 25/50 Index and the Industrial Select Sector SPDR Fund (XLI) tracks Industrial Select Sector Index. Vanguard Industrials ETF has $3.82 B in assets, Industrial Select Sector SPDR Fund has $13.13 B. VIS has an expense ratio of 0.10% and XLI charges 0.13%.

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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GUGG-SP5 EW IND (RGI): ETF Research Reports

CSX Corporation (CSX): Free Stock Analysis Report

Transdigm Group Incorporated (TDG): Free Stock Analysis Report

Textron Inc. (TXT): Free Stock Analysis Report

VIPERS-INDUS (VIS): ETF Research Reports

SPDR-INDU SELS (XLI): ETF Research Reports

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Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.



This article appears in: Investing , Stocks
Referenced Symbols: RGI , CSX , TDG , TXT , VIS



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