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Should Invesco Russell 1000 Equal Weight ETF (EQAL) Be on Your Investing Radar?

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Launched on 12/23/2014, the Invesco Russell 1000 Equal Weight ETF (EQAL) is a passively managed exchange traded fund designed to provide a broad exposure to the Large Cap Blend segment of the US equity market.

The fund is sponsored by Invesco. It has amassed assets over $455.28 M, making it one of the average sized ETFs attempting to match the Large Cap Blend segment of the US equity market.

Why Large Cap Blend

Large cap companies typically have a market capitalization above $10 billion. They tend to be stable companies with predictable cash flows and are usually less volatile than mid and small cap companies.

Blend ETFs are aptly named, since they tend to hold a mix of growth and value stocks, as well as show characteristics of both kinds of equities.

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 0.20%, putting it on par with most peer products in the space.

It has a 12-month trailing dividend yield of 1.32%.

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 to the Industrials sector--about 12.90% of the portfolio. Information Technology and Healthcare round out the top three.

Looking at individual holdings, Concho Resources Inc (CXO) accounts for about 0.45% of total assets, followed by Campbell Soup Co (CPB) and Dte Energy Co (DTE).

The top 10 holdings account for about 2.83% of total assets under management.

Performance and Risk

EQAL seeks to match the performance of the Russell 1000 Equal Weight Index before fees and expenses. The Russell 1000 Equal Weight Index is composed of securities in the Russell 1000 Index and is equally weighted across nine sector groups with each security within the sector receiving equal weight.

The ETF return is roughly 4.83% so far this year and was up about 14.25% in the last one year (as of 08/03/2018). In the past 52-week period, it has traded between $28.08 and $32.73.

The ETF has a beta of 1.02 and standard deviation of 13.62% for the trailing three-year period, making it a medium risk choice in the space. With about 971 holdings, it effectively diversifies company-specific risk.

Alternatives

Invesco Russell 1000 Equal Weight 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, EQAL is a sufficient option for those seeking exposure to the Large Cap ETFs area of the market. Investors might also want to consider some other ETF options in the space.

The iShares Core S&P 500 ETF (IVV) and the SPDR S&P 500 ETF (SPY) track a similar index. While iShares Core S&P 500 ETF has $153.75 B in assets, SPDR S&P 500 ETF has $270.41 B. IVV has an expense ratio of 0.04% and SPY charges 0.09%.

Bottom-Line

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.

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 .

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

PWRSH-R1000 EW (EQAL): ETF Research Reports

DTE Energy Company (DTE): Free Stock Analysis Report

SPDR-SP 500 TR (SPY): ETF Research Reports

ISHARS-SP500 (IVV): ETF Research Reports

Campbell Soup Company (CPB): Free Stock Analysis Report

Concho Resources Inc. (CXO): Free Stock Analysis Report

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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.


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

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