Designed to provide broad exposure to the Energy ETFs category of the market, the Invesco S&P 500 Equal Weight Energy ETF (RSPG) is a smart beta exchange traded fund launched on 11/01/2006.
What Are Smart Beta ETFs?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
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.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
The fund is managed by Invesco. RSPG has been able to amass assets over $565.22 million, making it one of the larger ETFs in the Energy ETFs. This particular fund, before fees and expenses, seeks to match the performance of the S&P 500 EQUAL WEIGHT ENERGY PLUS INDEX .
The S&P 500 Equal Weight Energy Plus Index equally weights stocks in the energy sector of the S&P 500 Index.
Cost & Other Expenses
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
Annual operating expenses for RSPG are 0.40%, which makes it one of the cheaper products in the space.
It has a 12-month trailing dividend yield of 2.21%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
For RSPG, it has heaviest allocation in the Energy sector --about 100% of the portfolio.
Taking into account individual holdings, Eqt Corp (EQT) accounts for about 4.88% of the fund's total assets, followed by Coterra Energy Inc (CTRA) and Apa Corp (APA).
The top 10 holdings account for about 47.59% of total assets under management.
Performance and Risk
The ETF return is roughly 10.16% and it's up approximately 19.10% so far this year and in the past one year (as of 01/16/2025), respectively. RSPG has traded between $69.70 and $86.09 during this last 52-week period.
The ETF has a beta of 1.42 and standard deviation of 18.91% for the trailing three-year period. With about 23 holdings, it has more concentrated exposure than peers.
Alternatives
Invesco S&P 500 Equal Weight Energy ETF is a reasonable option for investors seeking to outperform the Energy ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
Vanguard Energy ETF (VDE) tracks MSCI US Investable Market Energy 25/50 Index and the Energy Select Sector SPDR ETF (XLE) tracks Energy Select Sector Index. Vanguard Energy ETF has $8.14 billion in assets, Energy Select Sector SPDR ETF has $35.51 billion. VDE has an expense ratio of 0.10% and XLE 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 Energy ETFs.
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 500 Equal Weight Energy ETF (RSPG): ETF Research Reports
APA Corporation (APA) : Free Stock Analysis Report
EQT Corporation (EQT) : Free Stock Analysis Report
Energy Select Sector SPDR ETF (XLE): ETF Research Reports
Vanguard Energy ETF (VDE): ETF Research Reports
Coterra Energy Inc. (CTRA) : Free Stock Analysis Report
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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.
