Designed to provide broad exposure to the Large Cap Blend segment of the US equity market, the Invesco Russell 1000 Equal Weight ETF (EQAL) is a passively managed exchange traded fund launched on 12/23/2014.
The fund is sponsored by Invesco. It has amassed assets over $577.13 M, 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
Large cap companies typically have a market capitalization above $10 billion. Overall, they are usually a stable option, with less risk and more sure-fire cash flows than mid and small cap companies.
Blend ETFs usually hold a mix of growth and value stocks as well as stocks that exhibit both value and growth characteristics.
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%, putting it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.49%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Industrials sector--about 13.30% of the portfolio. Information Technology and Healthcare round out the top three.
Looking at individual holdings, Pbf Energy Inc (PBF) accounts for about 0.31% of total assets, followed by Marathon Petroleum Corp (MPC) and Aes Corp/va (AES).
The top 10 holdings account for about 2.79% 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 return is roughly 19.15% so far this year and was up about 10.35% in the last one year (as of 11/22/2019). In the past 52-week period, it has traded between $26.31 and $33.16.
The ETF has a beta of 1.07 and standard deviation of 12.55% for the trailing three-year period, making it a medium risk choice in the space. With about 986 holdings, it effectively diversifies company-specific risk.
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 reasonable 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 $195.17 B in assets, SPDR S&P 500 ETF has $278.18 B. IVV has an expense ratio of 0.04% and SPY charges 0.09%.
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.
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
The AES Corporation (AES) : Free Stock Analysis Report
iShares Core S&P 500 ETF (IVV): ETF Research Reports
SPDR S&P 500 ETF (SPY): ETF Research Reports
Marathon Petroleum Corporation (MPC) : Free Stock Analysis Report
PBF Energy Inc. (PBF) : Free Stock Analysis Report
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