A smart beta exchange traded fund, the Invesco S&P 500 Equal Weight ETF (RSP) debuted on 04/24/2003, and offers broad exposure to the Style Box - Large Cap Blend category of the market.
What Are Smart Beta ETFs?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
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.
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.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
Managed by Invesco, RSP has amassed assets over $73.63 billion, making it one of the largest ETFs in the Style Box - Large Cap Blend. Before fees and expenses, RSP seeks to match the performance of the S&P 500 Equal Weight Index.
The S&P 500 Equal Weight Index equally weights the stocks in the S&P 500 Index.
Cost & Other Expenses
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.
Operating expenses on an annual basis are 0.20% for RSP, making it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 0.81%.
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 Industrials sector - about 16.20% of the portfolio. Financials and Information Technology round out the top three.
Taking into account individual holdings, Palantir Technologies Inc (PLTR) accounts for about 0.29% of the fund's total assets, followed by Dollar Tree Inc (DLTR) and Ge Vernova Inc (GEV).
RSP's top 10 holdings account for about 2.59% of its total assets under management.
Performance and Risk
So far this year, RSP has gained about 2.91%, and was up about 7.77% in the last one year (as of 05/21/2025). During this past 52-week period, the fund has traded between $152.93 and $187.62.
The fund has a beta of 0.98 and standard deviation of 16.98% for the trailing three-year period. With about 507 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco S&P 500 Equal Weight ETF is a reasonable option for investors seeking to outperform the Style Box - Large Cap Blend segment of the market. However, there are other ETFs in the space which investors could consider.
SPDR S&P 500 ETF (SPY) tracks S&P 500 Index and the Vanguard S&P 500 ETF (VOO) tracks S&P 500 Index. SPDR S&P 500 ETF has $603.42 billion in assets, Vanguard S&P 500 ETF has $648.09 billion. SPY has an expense ratio of 0.09% and VOO charges 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
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 ETF (RSP): ETF Research Reports Dollar Tree, Inc. (DLTR): Free Stock Analysis Report SPDR S&P 500 ETF (SPY): ETF Research Reports Vanguard S&P 500 ETF (VOO): ETF Research Reports Palantir Technologies Inc. (PLTR): Free Stock Analysis Report GE Vernova Inc. (GEV): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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