Credit: Shutterstock photoThe Invesco Russell 1000 Equal Weight ETF (EQAL) was launched on 12/23/2014, and is a passively managed exchange traded fund designed to offer broad exposure to the Large Cap Blend segment of the US equity market.
The fund is sponsored by Invesco. It has amassed assets over $480.96 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 usually hold a mix of growth and value stocks as well as stocks that exhibit both value and growth characteristics.
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 0.20%, making it one of the cheaper products in the space.
It has a 12-month trailing dividend yield of 0.95%.
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 to the Information Technology sector--about 13.40% of the portfolio. Industrials and Healthcare round out the top three.
Looking at individual holdings, Concho Resources Inc (CXO) accounts for about 0.42% of total assets, followed by Sprouts Farmers Market Inc (SFM) and Casey's General Stores Inc (CASY).
The top 10 holdings account for about 2.97% 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 7.66% so far this year and was up about 15.51% in the last one year (as of 09/20/2018). In the past 52-week period, it has traded between $29.21 and $33.53.
The ETF has a beta of 1.02 and standard deviation of 12.85% for the trailing three-year period, making it a medium risk choice in the space. With about 969 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 good 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 $165.04 B in assets, SPDR S&P 500 ETF has $272.28 B. IVV has an expense ratio of 0.04% and SPY charges 0.09%.
Bottom-Line
While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.
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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PWRSH-R1000 EW (EQAL): ETF Research Reports
ISHARS-SP500 (IVV): ETF Research Reports
SPDR-SP 500 TR (SPY): ETF Research Reports
Sprouts Farmers Market, Inc. (SFM): Free Stock Analysis Report
Concho Resources Inc. (CXO): Free Stock Analysis Report
Caseys General Stores, Inc. (CASY): Free Stock Analysis Report
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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.
