The Invesco S&P 100 Equal Weight ETF (EQWL) was launched on 12/01/2006, and is a smart beta exchange traded fund designed to offer broad exposure to the Style Box - Large Cap Blend category of the market.
What Are Smart Beta ETFs?
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 offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.
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.
Fund Sponsor & Index
Because the fund has amassed over $951.80 million, this makes it one of the larger ETFs in the Style Box - Large Cap Blend. EQWL is managed by Invesco. Before fees and expenses, this particular fund seeks to match the performance of the Russell Top 200 Equal Weight Index.
The S&P 100 Equal Weight Index is designed to provide equal-weighted exposure to the securities of the largest 200 companies in the US equity market.
Cost & Other Expenses
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.
Operating expenses on an annual basis are 0.25% for EQWL, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.86%.
Sector Exposure and Top Holdings
Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.
This ETF has heaviest allocation in the Financials sector - about 20.40% of the portfolio. Information Technology and Industrials round out the top three.
Looking at individual holdings, Tesla Inc (TSLA) accounts for about 1.44% of total assets, followed by Wells Fargo & Co (WFC) and Capital One Financial Corp (COF).
Its top 10 holdings account for approximately 12.61% of EQWL's total assets under management.
Performance and Risk
So far this year, EQWL has added about 0.22%, and was up about 19.66% in the last one year (as of 01/07/2025). During this past 52-week period, the fund has traded between $86.61 and $107.72.
The fund has a beta of 0.97 and standard deviation of 15.40% for the trailing three-year period, which makes EQWL a medium risk choice in this particular space. With about 102 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco S&P 100 Equal Weight ETF is a reasonable option for investors seeking to outperform the Style Box - Large Cap Blend segment of the market. However, there are other ETFs in the space which investors could consider.
IShares Core S&P 500 ETF (IVV) tracks S&P 500 Index and the SPDR S&P 500 ETF (SPY) tracks S&P 500 Index. IShares Core S&P 500 ETF has $594.99 billion in assets, SPDR S&P 500 ETF has $635.81 billion. IVV has an expense ratio of 0.03% and SPY charges 0.09%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - Large Cap Blend.
Bottom Line
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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Get it free >>Invesco S&P 100 Equal Weight ETF (EQWL): ETF Research Reports
Wells Fargo & Company (WFC) : Free Stock Analysis Report
Capital One Financial Corporation (COF) : Free Stock Analysis Report
Tesla, Inc. (TSLA) : Free Stock Analysis Report
SPDR S&P 500 ETF (SPY): ETF Research Reports
iShares Core S&P 500 ETF (IVV): ETF Research Reports
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
