A smart beta exchange traded fund, the Invesco S&P 500 Equal Weight Health Care ETF (RSPH) debuted on 11/01/2006, and offers broad exposure to the Health Care ETFs category of the market.
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.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
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
The fund is sponsored by Invesco. It has amassed assets over $732.54 million, making it one of the larger ETFs in the Health Care ETFs. RSPH, before fees and expenses, seeks to match the performance of the S&P 500 EQUAL WEIGHT HEALTH CARE INDEX .
The S&P 500 Equal Weight Health Care Index equally weights stocks in the health care 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.
Operating expenses on an annual basis are 0.40% for RSPH, making it on par with most peer products in the space.
RSPH's 12-month trailing dividend yield is 0.79%.
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.
Representing 100% of the portfolio, the fund has heaviest allocation to the Healthcare sector.
Taking into account individual holdings, Gilead Sciences Inc (GILD) accounts for about 2.07% of the fund's total assets, followed by Cvs Health Corp (CVS) and Abbott Laboratories (ABT).
The top 10 holdings account for about 19.46% of total assets under management.
Performance and Risk
The ETF has lost about -6.23% and is down about -10.21% so far this year and in the past one year (as of 04/08/2025), respectively. RSPH has traded between $27.42 and $32.53 during this last 52-week period.
The fund has a beta of 0.88 and standard deviation of 15.99% for the trailing three-year period. With about 63 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco S&P 500 Equal Weight Health Care ETF is a reasonable option for investors seeking to outperform the Health Care ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
Vanguard Health Care ETF (VHT) tracks MSCI US Investable Market Health Care 25/50 Index and the Health Care Select Sector SPDR ETF (XLV) tracks Health Care Select Sector Index. Vanguard Health Care ETF has $15.15 billion in assets, Health Care Select Sector SPDR ETF has $35.31 billion. VHT has an expense ratio of 0.09% and XLV charges 0.08%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Health Care 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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Invesco S&P 500 Equal Weight Health Care ETF (RSPH): ETF Research Reports Abbott Laboratories (ABT): Free Stock Analysis Report Gilead Sciences, Inc. (GILD): Free Stock Analysis Report CVS Health Corporation (CVS): Free Stock Analysis Report Health Care Select Sector SPDR ETF (XLV): ETF Research Reports Vanguard Health Care ETF (VHT): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).
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