Should Invesco Russell 1000 Equal Weight ETF (EQAL) Be on Your Investing Radar?
Style Box ETF report for EQAL
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 $629.40 million, making it one of the larger 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.
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
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 1.51%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. 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 13.80% of the portfolio. Industrials and Financials round out the top three.
Looking at individual holdings, Coterra Energy Inc (CTRA) accounts for about 0.56% of total assets, followed by Viasat Inc (VSAT) and Arista Networks Inc (ANET).
The top 10 holdings account for about 4.69% 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 22.37% so far this year and was up about 22.64% in the last one year (as of 12/08/2021). In the past 52-week period, it has traded between $38.16 and $48.05.
The ETF has a beta of 1.16 and standard deviation of 24.59% for the trailing three-year period, making it a medium risk choice in the space. With about 1013 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 sufficient 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 $329.66 billion in assets, SPDR S&P 500 ETF has $428.70 billion. IVV has an expense ratio of 0.03% and SPY charges 0.09%.
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.
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
Viasat Inc. (VSAT): Free Stock Analysis Report
SPDR S&P 500 ETF (SPY): ETF Research Reports
Arista Networks, Inc. (ANET): Free Stock Analysis Report
iShares Core S&P 500 ETF (IVV): ETF Research Reports
Coterra Energy Inc. (CTRA): Free Stock Analysis Report
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