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Should Invesco Russell 1000 Equal Weight ETF (EQAL) Be on Your Investing Radar?

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·4 min read
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Launched on 12/23/2014, the Invesco Russell 1000 Equal Weight ETF (EQAL) is a passively managed exchange traded fund designed to provide a broad exposure to the Large Cap Blend segment of the US equity market.

The fund is sponsored by Invesco. It has amassed assets over $669.47 million, 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

Companies that fall in the large cap category tend to 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 are aptly named, since they tend to hold a mix of growth and value stocks, as well as show characteristics of both kinds of equities.

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 0.20%, making it one of the cheaper products in the space.

It has a 12-month trailing dividend yield of 1.54%.

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 14.40% of the portfolio. Industrials and Financials round out the top three.

Looking at individual holdings, Roku Inc (ROKU) accounts for about 0.56% of total assets, followed by Liberty Broadband Corp (LBRDK) and Cable One Inc (CABO).

The top 10 holdings account for about 4.78% 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 has added roughly 20.58% so far this year and is up about 38.78% in the last one year (as of 10/08/2021). In the past 52-week period, it has traded between $32.08 and $46.81.

The ETF has a beta of 1.17 and standard deviation of 24.78% for the trailing three-year period, making it a medium risk choice in the space. With about 1012 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 Style Box - Large Cap Blend 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 $293.16 billion in assets, SPDR S&P 500 ETF has $391.66 billion. IVV has an expense ratio of 0.03% 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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Invesco Russell 1000 Equal Weight ETF (EQAL): ETF Research Reports
 
SPDR S&P 500 ETF (SPY): ETF Research Reports
 
Cable One, Inc. (CABO) : Free Stock Analysis Report
 
Liberty Broadband Corporation (LBRDK) : Free Stock Analysis Report
 
iShares Core S&P 500 ETF (IVV): ETF Research Reports
 
Roku, Inc. (ROKU) : Free Stock Analysis Report
 
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