Should You Invest in the Invesco S&P 500 Equal Weight Materials ETF (RSPM)?
Launched on 11/01/2006, the Invesco S&P 500 Equal Weight Materials ETF (RSPM) is a passively managed exchange traded fund designed to provide a broad exposure to the Materials - 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. Materials - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 14, placing it in bottom 13%.
Index Details
The fund is sponsored by Invesco. It has amassed assets over $264.50 million, making it one of the average sized ETFs attempting to match the performance of the Materials - Broad segment of the equity market. RSPM seeks to match the performance of the S&P 500 EQUAL WEIGHT MATERIALS INDEX before fees and expenses.
The S&P 500 Equal Weight Materials Index equally weights stocks in the materials 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 one of the cheaper products in the space.
It has a 12-month trailing dividend yield of 2.41%.
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 in the Materials sector--about 100% of the portfolio.
Looking at individual holdings, Steel Dynamics Inc (STLD) accounts for about 3.80% of total assets, followed by Westrock Co (WRK) and Packaging Corp Of America (PKG).
The top 10 holdings account for about 36.62% of total assets under management.
Performance and Risk
Year-to-date, the Invesco S&P 500 Equal Weight Materials ETF has lost about -5.40% so far, and is down about -2.33% over the last 12 months (as of 10/31/2023). RSPM has traded between $28.92 and $35.46 in this past 52-week period.
The ETF has a beta of 1.12 and standard deviation of 21.55% for the trailing three-year period. With about 30 holdings, it has more concentrated exposure than peers.
Alternatives
Invesco S&P 500 Equal Weight Materials 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, RSPM is a reasonable option for those seeking exposure to the Materials ETFs area of the market. Investors might also want to consider some other ETF options in the space.
Materials Select Sector SPDR ETF (XLB) tracks Materials Select Sector Index and the FlexShares Morningstar Global Upstream Natural Resources ETF (GUNR) tracks Morningstar Global Upstream Natural Resources Index. Materials Select Sector SPDR ETF has $5.28 billion in assets, FlexShares Morningstar Global Upstream Natural Resources ETF has $6.99 billion. XLB has an expense ratio of 0.10% and GUNR charges 0.46%.
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 Materials ETF (RSPM): ETF Research Reports
Steel Dynamics, Inc. (STLD) : Free Stock Analysis Report
Packaging Corporation of America (PKG) : Free Stock Analysis Report
Materials Select Sector SPDR ETF (XLB): ETF Research Reports
WestRock Company (WRK) : Free Stock Analysis Report
FlexShares Morningstar Global Upstream Natural Resources ETF (GUNR): ETF Research Reports
