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 $370.24 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 find themselves in the large cap category typically 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.
Typically holding a combination of both growth and value stocks, blend ETFs also demonstrate qualities seen in value and growth investments.
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 2.32%.
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 to the Energy sector–about 13.50% of the portfolio. Information Technology and Healthcare round out the top three.
Looking at individual holdings, Range Resources Corp (RRC) accounts for about 0.61% of total assets, followed by Antero Resources Corp (AR) and T-Mobile Us Inc (TMUS).
The top 10 holdings account for about 4.26% 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 lost about -18.25% so far this year and is down about -14.09% in the last one year (as of 05/18/2020). In the past 52-week period, it has traded between $20.58 and $34.82.
The ETF has a beta of 1.20 and standard deviation of 22.34% for the trailing three-year period, making it a medium risk choice in the space. With about 982 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 SP 500 ETF (IVV) and the SPDR SP 500 ETF (SPY) track a similar index. While iShares Core SP 500 ETF has $178.11 billion in assets, SPDR SP 500 ETF has $258 billion. 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
Range Resources Corporation (RRC) : Free Stock Analysis Report
SPDR SP 500 ETF (SPY): ETF Research Reports
TMobile US, Inc. (TMUS) : Free Stock Analysis Report
Antero Resources Corporation (AR) : Free Stock Analysis Report
iShares Core SP 500 ETF (IVV): ETF Research Reports
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