A smart beta exchange traded fund, the Invesco S&P 500 Equal Weight Technology ETF (RSPT) debuted on 11/01/2006, and offers broad exposure to the Technology ETFs category of the market.
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
If you’re the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Because the fund has amassed over $3.59 billion, this makes it one of the larger ETFs in the Technology ETFs. RSPT is managed by Invesco. This particular fund, before fees and expenses, seeks to match the performance of the S&P 500 EQUAL WEIGHT INFO TECH INDEX .
The S&P 500 Equal Weight Information Technology Index equally weights stocks in the information technology sector of the S&P 500 Index.
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 0.40%, making it one of the cheaper products in the space.
The fund has a 12-month trailing dividend yield of 0.44%.
ETFs offer 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.
Representing 100% of the portfolio, the fund has heaviest allocation to the Information Technology sector.
Taking into account individual holdings, Jabil Inc (JBL) accounts for about 1.73% of the fund’s total assets, followed by Intel Corp (INTC) and Palantir Technologies Inc (PLTR).
Its top 10 holdings account for approximately 16.64% of RSPT’s total assets under management.
