Are you looking for a wide exposure to utilities – a wide segment of the stock market? You should consider the Invesco S&P 500 Equal Weight Utilities ETF (RYU), a passively managed exchange-traded fund launched on January 11, 2006.
Retail and institutional investors are increasingly turning to passively managed ETFs because they offer low costs, transparency, flexibility and fiscal efficiency; this type of funds are also excellent funds for long-term investors.
In addition, sector ETFs offer convenient ways to obtain low risk and diversified exposure to a wide group of companies in certain sectors. Utilities – Broad is one of the 16 broad sectors of Zacks in the Zacks Industry classification. He is currently in 7th place, which puts him in the top 44%.
The fund is sponsored by Invesco. It has amassed assets of more than $ 355.35 million, making it one of the medium-sized ETFs trying to match the performance of utilities, a broad segment of the stock market. RYU seeks to equal the performance of the S&P 500 telecommunications and utilities index with equal weight before fees and costs.
The S&P 500 Telecommunications and Utilities Index weighs equally on stocks found in the utilities and telecommunications services sectors of the S&P 500 Index.
Investors should also pay attention to the cost ratio of the ETF. Products with a lower price will give better results than those with a higher price, if we assume that all other indicators remain the same.
The annual operating cost of this ETF is 0.40%, making it one of the cheapest products in the space.
It has a 12-month dividend yield of 2.51%.
Sectoral exposition and leading holdings
Although ETFs offer diversified exposure that minimizes the risk of individual stocks, it is still important to look at the fund’s assets before investing. Fortunately, most ETFs are very transparent products that disclose their assets on a daily basis.
This ETF has the largest distribution in the utilities sector – about 100% of the portfolio.
Looking at individual holdings, Atmos Energy Corp (ATO) accounts for about 4.14% of total assets, followed by Sempra Energy (SRE) and Nisource Inc (NI).
The first 10 farms represent about 38.49% of the total assets under management.
Productivity and risk
So far this year, RYU has lost about -6.04% and increased by about 1.21% in the last year (as of June 20, 2022). Over the past 52 weeks, the fund has traded between $ 102.46 and $ 126.08.
The ETF has a beta of 0.47 and a standard deviation of 25.51% over the last three years, making it a medium risk choice in space. With about 30 farms, it has a more concentrated exposure than its competitors.
The Invesco S&P 500 Equal Weight Utilities ETF has a Zacks ETF rating of 3 (retention), which is based on expected return on asset class, cost-effectiveness ratio, among other factors. Thus, RYU is a reasonable option for those seeking exposure to the ETF for utilities / infrastructure market. Investors may also want to consider some other ETF options in the space.
Vanguard Utilities ETF (VPU) tracks the MSCI US Investable Market Utilities 25/50 Index and Utilities Select Sector SPDR ETF (XLU) tracks the Utilities Select Sector Index. Vanguard Utilities ETF has $ 5.25 billion in assets, Utilities Select Sector SPDR ETF has $ 14.71 billion. VPU has a cost ratio of 0.10% and XLU charges 0.10%.
To learn more about this product and other ETFs, browse for products that meet your investment goals and read articles on the latest developments in the ETF investment universe, please visit the Zacks ETF Center.
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