The Invesco S&P 500 Equal Weight Financials ETF (RSPF) made its debut on 11/01/2006, and is a smart beta exchange traded fund that provides broad exposure to the Financials ETFs category of the market.

What Are Smart Beta ETFs?

Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.

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

On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.

This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of 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

Managed by Invesco, RSPF has amassed assets over $277.95 million, making it one of the average sized ETFs in the Financials ETFs. RSPF seeks to match the performance of the S&P 500 EQUAL WEIGHT FINANCIALS INDEX before fees and expenses.

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

Cost & Other Expenses

Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins 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 1.35%.

Sector Exposure and Top Holdings

Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.

RSPF's heaviest allocation is in the Financials sector, which is about 100% of the portfolio.

Looking at individual holdings, Globe Life Inc (GL) accounts for about 1.67% of total assets, followed by Cboe Global Markets Inc (CBOE) and Corpay Inc (CPAY).

RSPF's top 10 holdings account for about 15.56% of its total assets under management.

Performance and Risk

Year-to-date, the Invesco S&P 500 Equal Weight Financials ETF has gained about 17.88% so far, and is up roughly 41.03% over the last 12 months (as of 10/04/2024). RSPF has traded between $48.10 and $69.60 in this past 52-week period.

The ETF has a beta of 1.05 and standard deviation of 13.66% for the trailing three-year period. With about 73 holdings, it effectively diversifies company-specific risk.

Alternatives

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

Vanguard Financials ETF (VFH) tracks MSCI US Investable Market Financials 25/50 Index and the Financial Select Sector SPDR ETF (XLF) tracks Financial Select Sector Index. Vanguard Financials ETF has $9.98 billion in assets, Financial Select Sector SPDR ETF has $41.84 billion. VFH has an expense ratio of 0.10% and XLF 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 Financials 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 Financials ETF (RSPF): ETF Research Reports

Cboe Global Markets, Inc. (CBOE) : Free Stock Analysis Report

Financial Select Sector SPDR ETF (XLF): ETF Research Reports

Vanguard Financials ETF (VFH): ETF Research Reports

Globe Life Inc. (GL) : Free Stock Analysis Report

Corpay, Inc. (CPAY) : Free Stock Analysis Report

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