Is ALPS Equal Sector Weight ETF (EQL) a Strong ETF Right Now?

Launched on 07/07/2009, the ALPS Equal Sector Weight ETF (EQL) is a smart beta exchange traded fund offering broad exposure to the Style Box - Large Cap Blend 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.

Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.

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.

This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.

This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.

Fund Sponsor & Index

Managed by Alps, EQL has amassed assets over $521.61 million, making it one of the average sized ETFs in the Style Box - Large Cap Blend. This particular fund, before fees and expenses, seeks to match the performance of the NYSE Select Sector Equal Weight Index.

The NYSE Equal Sector Weight Index comprises of all active Select Sector SPDR ETFs in an equal weighted portfolio. These sector includes Consumer Discretionary, Consumer Staples, Materials, Energy, Technology, Utilities, Financial, Industrial, Health Care & Real Estate.

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 0.27% for EQL, making it on par with most peer products in the space.

It has a 12-month trailing dividend yield of 1.72%.

Sector Exposure and Top Holdings

While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.

Looking at individual holdings, Utilities Select Sector Spdr Fund (XLU) accounts for about 9.54% of total assets, followed by Health Care Select Sector Spdr Fund (XLV) and Technology Select Sector Spdr Fund (XLK).

The top 10 holdings account for about 91.17% of total assets under management.

Performance and Risk

Year-to-date, the ALPS Equal Sector Weight ETF has added roughly 11.02% so far, and is up about 11.11% over the last 12 months (as of 11/04/2025). EQL has traded between $37.36 $46.71 in this past 52-week period.

EQL has a beta of 0.91 and standard deviation of 13.36% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 12 holdings, it has more concentrated exposure than peers .

Alternatives

ALPS Equal Sector Weight ETF is an excellent option for investors seeking to outperform the Style Box - Large Cap Blend segment of the market. There are other ETFs in the space which investors could consider as well.

iShares Core S&P 500 ETF (IVV) tracks S&P 500 Index and the Vanguard S&P 500 ETF (VOO) tracks S&P 500 Index. iShares Core S&P 500 ETF has $720.51 billion in assets, Vanguard S&P 500 ETF has $781.63 billion. IVV has an expense ratio of 0.03% and VOO changes 0.03%.

Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - Large Cap Blend

Bottom Line

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This article originally published on Zacks Investment Research (zacks.com).

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