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Launched on 11/01/2006, the Invesco S&P 500 Equal Weight Financials ETF (RYF) is a passively managed exchange traded fund designed to provide a broad exposure to the Financials - 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.
Additionally, sector ETFs offer convenient ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. Financials - 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 $427.71 million, making it one of the average sized ETFs attempting to match the performance of the Financials - Broad segment of the equity market. RYF 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.
Costs
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
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 2.04%.
Sector Exposure and Top Holdings
ETFs offer a 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.
This ETF has heaviest allocation in the Financials sector--about 100% of the portfolio.
Looking at individual holdings, Allstate Corp/the (ALL) accounts for about 1.83% of total assets, followed by M&t Bank Corp (MTB) and People's United Financial Inc (PBCT).
The top 10 holdings account for about 17.36% of total assets under management.
Performance and Risk
So far this year, RYF has lost about -16.81%, and is down about -7.45% in the last one year (as of 07/19/2022). During this past 52-week period, the fund has traded between $51.80 and $67.90.
The ETF has a beta of 1.14 and standard deviation of 32.08% for the trailing three-year period, making it a medium risk choice in the space. With about 69 holdings, it effectively diversifies company-specific risk.