The Invesco S&P 500 Equal Weight Industrials ETF (RSPN) was launched on 11/01/2006, and is a smart beta exchange traded fund designed to offer broad exposure to the Industrials ETFs category of the market.

What Are Smart Beta ETFs?

Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.

Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.

There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.

Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.

This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.

Fund Sponsor & Index

The fund is managed by Invesco. RSPN has been able to amass assets over $623.73 million, making it one of the average sized ETFs in the Industrials ETFs. RSPN, before fees and expenses, seeks to match the performance of the S&P 500 EQUAL WEIGHT INDUSTRIALS INDEX .

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

Cost & Other Expenses

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.

With one of the cheaper products in the space, this ETF has annual operating expenses of 0.40%.

It has a 12-month trailing dividend yield of 0.95%.

Sector Exposure and Top Holdings

ETFs offer 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.

Representing 99.70% of the portfolio, the fund has heaviest allocation to the Industrials sector.

Taking into account individual holdings, 3m Co (MMM) accounts for about 1.62% of the fund's total assets, followed by General Electric Co (GE) and Ge Vernova Inc (GEV).

RSPN's top 10 holdings account for about 15.24% of its total assets under management.

Performance and Risk

So far this year, RSPN has gained about 10.54%, and is up about 14.98% in the last one year (as of 07/23/2024). During this past 52-week period, the fund has traded between $36.10 and $48.20.

RSPN has a beta of 1.12 and standard deviation of 18.01% for the trailing three-year period. With about 81 holdings, it effectively diversifies company-specific risk.

Alternatives

Invesco S&P 500 Equal Weight Industrials ETF is an excellent option for investors seeking to outperform the Industrials ETFs segment of the market. There are other ETFs in the space which investors could consider as well.

Vanguard Industrials ETF (VIS) tracks MSCI US Investable Market Industrials 25/50 Index and the Industrial Select Sector SPDR ETF (XLI) tracks Industrial Select Sector Index. Vanguard Industrials ETF has $5.34 billion in assets, Industrial Select Sector SPDR ETF has $20.04 billion. VIS has an expense ratio of 0.10% and XLI charges 0.09%.

Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Industrials ETFs.

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 Industrials ETF (RSPN): ETF Research Reports

GE Aerospace (GE) : Free Stock Analysis Report

3M Company (MMM) : Free Stock Analysis Report

Vanguard Industrials ETF (VIS): ETF Research Reports

Industrial Select Sector SPDR ETF (XLI): ETF Research Reports

GE Vernova Inc. (GEV) : Free Stock Analysis Report

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