Invesco S&P 500 Equal Weight Utilities ETF: A Smart Beta Approach to Utilities Investing

The Invesco S&P 500 Equal Weight Utilities ETF (RSPU) is a smart beta exchange traded fund that provides broad exposure to the Utilities/Infrastructure ETFs category. Smart beta ETFs are known for tracking non-cap weighted strategies, which select stocks based on specific fundamental characteristics or a mix of other characteristics. RSPU is managed by Invesco and has accumulated over $321.88 million in assets.

The fund seeks to match the performance of the S&P 500 EQUAL WEIGHT TELECM-UTILITY INDEX, which equally weights stocks from the utilities and telecommunication services sectors of the S&P 500 Index. RSPU has an expense ratio of 0.40%, making it one of the cheaper products in its space.

The portfolio of RSPU is heavily allocated to the Utilities sector, representing 100% of the holdings. The top holdings include Constellation Energy Corp (CEG), Nrg Energy Inc (NRG), and Edison International (EIX), which account for about 3.90% of the fund’s total assets. The top 10 holdings make up approximately 35.04% of the total assets under management.

In terms of performance, the Invesco S&P 500 Equal Weight Utilities ETF has experienced a loss of -5.54% year-to-date and -10.21% over the past 12 months (as of 09/14/2023). The ETF has a beta of 0.56 and a standard deviation of 17.70% for the trailing three-year period. With about 32 holdings, RSPU has a more concentrated exposure compared to its peers.

It’s important to note that RSPU may not be the best option for investors looking to outperform the Utilities/Infrastructure ETFs segment of the market. There are alternative ETFs such as the Vanguard Utilities ETF (VPU) and the Utilities Select Sector SPDR ETF (XLU) that investors should consider. VPU tracks the MSCI US Investable Market Utilities 25/50 Index and has $5.17 billion in assets, while XLU tracks the Utilities Select Sector Index and has $14.99 billion in assets.

In conclusion, the Invesco S&P 500 Equal Weight Utilities ETF provides investors with a smart beta approach to utilities investing. However, there are alternative ETFs available for those seeking to outperform the Utilities/Infrastructure ETFs segment. Investors should carefully consider their investment objectives and do thorough research before making any investment decisions.