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

The Invesco Russell 1000 Equal Weight ETF (EQAL) was launched on 12/23/2014, and is a passively managed exchange traded fund designed to offer broad exposure to the Large Cap Blend segment of the US equity market.

The fund is sponsored by Invesco. It has amassed assets over $358.45 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. Considered a more stable option, large cap companies boast more predictable cash flows and are less volatile than their mid and small cap counterparts.

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

Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are 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 2.40%.

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 Information Technology sector--about 13.30% of the portfolio. Healthcare and Industrials round out the top three.

Looking at individual holdings, T-Mobile Us Inc (TMUS) accounts for about 0.51% of total assets, followed by Range Resources Corp (RRC) and Eqt Corp (EQT).

The top 10 holdings account for about 3.52% 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 -21.23% so far this year and is down about -17.40% in the last one year (as of 04/24/2020). In the past 52-week period, it has traded between $20.58 and $34.82.

The ETF has a beta of 1.16 and standard deviation of 21.78% 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.

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 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 $176.63 billion in assets, SPDR S&P 500 ETF has $258.48 billion. IVV has an expense ratio of 0.04% and SPY charges 0.09%.

Bottom-Line

Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are 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
 
EQT Corporation (EQT): Free Stock Analysis Report
 
Range Resources Corporation (RRC): Free Stock Analysis Report
 
SPDR S&P 500 ETF (SPY): ETF Research Reports
 
T-Mobile US, Inc. (TMUS): Free Stock Analysis Report
 
iShares Core S&P 500 ETF (IVV): ETF Research Reports
 
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