Designed to provide broad exposure to the Utilities/Infrastructure ETFs category of the market, the Invesco S&P 500 Equal Weight Utilities ETF (RSPU) is a smart beta exchange traded fund launched on 11/01/2006.
What Are Smart Beta ETFs?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.
A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track 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.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
The fund is managed by Invesco, and has been able to amass over $370 million, which makes it one of the average sized ETFs in the Utilities/Infrastructure ETFs. This particular fund seeks to match the performance of the S&P 500 EQUAL WEIGHT UTILITIES PLUS INDX before fees and expenses.
The S&P 500 Equal Weight Utilities Plus Index equally weights the common stocks of all companies included in the S&P 500 Index that are classified as members of the utilities sector.
Cost & Other Expenses
For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.
Operating expenses on an annual basis are 0.40% for this ETF, which makes it on par with most peer products in the space.
RSPU's 12-month trailing dividend yield is 2.34%.
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 Utilities sector - about 100% of the portfolio.
Taking into account individual holdings, Vistra Corp (VST) accounts for about 3.61% of the fund's total assets, followed by Exelon Corp (EXC) and Entergy Corp (ETR).
Its top 10 holdings account for approximately 33.58% of RSPU's total assets under management.
Performance and Risk
Year-to-date, the Invesco S&P 500 Equal Weight Utilities ETF has added roughly 2.24% so far, and was up about 30.08% over the last 12 months (as of 02/04/2025). RSPU has traded between $51.66 and $71.48 in this past 52-week period.
The fund has a beta of 0.66 and standard deviation of 17.99% for the trailing three-year period. With about 32 holdings, it has more concentrated exposure than peers.
Alternatives
Invesco S&P 500 Equal Weight Utilities ETF is a reasonable option for investors seeking to outperform the Utilities/Infrastructure ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
Vanguard Utilities ETF (VPU) tracks MSCI US Investable Market Utilities 25/50 Index and the Utilities Select Sector SPDR ETF (XLU) tracks Utilities Select Sector Index. Vanguard Utilities ETF has $6.68 billion in assets, Utilities Select Sector SPDR ETF has $17.41 billion. VPU has an expense ratio of 0.10% and XLU 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 Utilities/Infrastructure 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 Utilities ETF (RSPU): ETF Research Reports
Exelon Corporation (EXC) : Free Stock Analysis Report
Entergy Corporation (ETR) : Free Stock Analysis Report
Utilities Select Sector SPDR ETF (XLU): ETF Research Reports
Vanguard Utilities ETF (VPU): ETF Research Reports
Vistra Corp. (VST) : 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.
