Should You Invest in the Invesco S&P 500 Equal Weight Health Care ETF (RSPH)?

Launched on 11/01/2006, the Invesco S&P 500 Equal Weight Health Care ETF (RSPH) is a passively managed exchange traded fund designed to provide a broad exposure to the Healthcare - Broad segment of the equity market.

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. Healthcare - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 4, placing it in top 25%.

Index Details

The fund is sponsored by Invesco. It has amassed assets over $959.42 million, making it one of the larger ETFs attempting to match the performance of the Healthcare - Broad segment of the equity market. RSPH seeks to match the performance of the S&P 500 EQUAL WEIGHT HEALTH CARE INDEX before fees and expenses.

The S&P 500 Equal Weight Health Care Index equally weights stocks in the health care sector of the S&P 500 Index.

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 one of the cheaper products in the space.

It has a 12-month trailing dividend yield of 0.65%.

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 Healthcare sector--about 100% of the portfolio.

Looking at individual holdings, West Pharmaceutical Services Inc (WST) accounts for about 1.73% of total assets, followed by Cigna Group/the (CI) and Merck & Co Inc (MRK).

The top 10 holdings account for about 16.51% of total assets under management.

Performance and Risk

The ETF has added about 0.93% so far this year and was up about 1.92% in the last one year (as of 05/07/2024). In that past 52-week period, it has traded between $25.30 and $31.79.

The ETF has a beta of 0.85 and standard deviation of 16.20% for the trailing three-year period. With about 66 holdings, it effectively diversifies company-specific risk.

Alternatives

Invesco S&P 500 Equal Weight Health Care 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, RSPH is a reasonable option for those seeking exposure to the Health Care ETFs area of the market. Investors might also want to consider some other ETF options in the space.

Vanguard Health Care ETF (VHT) tracks MSCI US Investable Market Health Care 25/50 Index and the Health Care Select Sector SPDR ETF (XLV) tracks Health Care Select Sector Index. Vanguard Health Care ETF has $17.36 billion in assets, Health Care Select Sector SPDR ETF has $38.27 billion. VHT has an expense ratio of 0.10% and XLV charges 0.09%.

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 Health Care ETF (RSPH): ETF Research Reports

Merck & Co., Inc. (MRK) : Free Stock Analysis Report

Cigna Group (CI) : Free Stock Analysis Report

West Pharmaceutical Services, Inc. (WST) : Free Stock Analysis Report

Health Care Select Sector SPDR ETF (XLV): ETF Research Reports

Vanguard Health Care ETF (VHT): ETF Research Reports

To read this article on Zacks.com click here.

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.

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