Should You Invest in the Invesco S&P 500 Equal Weight Utilities ETF (RYU)?
Sector ETF report for RYU
Launched on 11/01/2006, the Invesco S&P 500 Equal Weight Utilities ETF (RYU - Free Report) is a passively managed exchange traded fund designed to provide a broad exposure to the Utilities - Broad segment of the equity market.Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are excellent vehicles for long term investors.Investor-friendly, sector ETFs provide many options to gain low risk and diversified exposure to a broad group of companies in particular sectors. Utilities - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification.
It is currently ranked 9, placing it in bottom 44%.Index DetailsThe fund is sponsored by Invesco. It has amassed assets over $420.53 million, making it one of the average sized ETFs attempting to match the performance of the Utilities - Broad segment of the equity market. RYU seeks to match the performance of the S&P 500 Equal Weight Telecommunication Services & Utilities Index before fees and expenses.The S&P 500 Equal Weight Telecommunication Services & Utilities Index equally weights stocks found in the utilities and telecommunication services sectors of the S&P 500 Index.CostsCost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are the same.Annual operating expenses for this ETF are 0.40%, making it on par with most peer products in the space.It has a 12-month trailing dividend yield of 2.33%.Sector Exposure and Top HoldingsEven though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund.
Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.This ETF has heaviest allocation in the Utilities sector--about 100% of the portfolio.Looking at individual holdings, Constellation Energy Corp (CEG - Free Report) accounts for about 4.31% of total assets, followed by Aes Corp/the (AES - Free Report) and Nextera Energy Inc (NEE - Free Report) .The top 10 holdings account for about 36.39% of total assets under management.Performance and RiskThe ETF return is roughly 5.83% and is up about 7.62% so far this year and in the past one year (as of 12/26/2022), respectively. RYU has traded between $101.43 and $127.40 during this last 52-week period.The ETF has a beta of 0.53 and standard deviation of 26.91% for the trailing three-year period, making it a medium risk choice in the space. With about 30 holdings, it has more concentrated exposure than peers.AlternativesInvesco S&P 500 Equal Weight Utilities ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors.
Thus, RYU is a reasonable option for those seeking exposure to the Utilities/Infrastructure ETFs area of the market. Investors might also want to consider some other ETF options in the space.Vanguard Utilities ETF (VPU - Free Report) tracks MSCI US Investable Market Utilities 25/50 Index and the Utilities Select Sector SPDR ETF (XLU - Free Report) tracks Utilities Select Sector Index. Vanguard Utilities ETF has $5.67 billion in assets, Utilities Select Sector SPDR ETF has $16.64 billion.
VPU has an expense ratio of 0.10% and XLU charges 0.10%.Bottom LineTo 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.