The ALPS Equal Sector Weight ETF (EQL) was launched on 07/07/2009, and is a smart beta exchange traded fund designed to offer broad exposure to the Style Box - Large Cap Blend category of the market.
What Are Smart Beta ETFs?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking 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.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
EQL is managed by Alps, and this fund has amassed over $532.54 million, which makes it one of the average sized ETFs in the Style Box - Large Cap Blend. Before fees and expenses, EQL 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
Expense ratios are an important factor in the return of an ETF and in the long-term, cheaper funds can significantly outperform their more expensive cousins, other things remaining the same.
With on par with most peer products in the space, this ETF has annual operating expenses of 0.25%.
The fund has a 12-month trailing dividend yield of 1.76%.
Sector Exposure and Top Holdings
ETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
When you look at individual holdings, Technology Select Sector Spdr Fund (XLK) accounts for about 9.89% of the fund's total assets, followed by Industrial Select Sector Spdr Fund (XLI) and Consumer Discretionary Select Sector Spdr Fund (XLY).
The top 10 holdings account for about 91.84% of total assets under management.
Performance and Risk
So far this year, EQL has added roughly 6.8%, and is up roughly 14.41% in the last one year (as of 07/03/2025). During this past 52-week period, the fund has traded between $37.36 and $44.40.
EQL has a beta of 0.91 and standard deviation of 14.95% 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.
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 $638.54 billion in assets, Vanguard S&P 500 ETF has $690.04 billion. SPY has an expense ratio of 0.09% 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
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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ALPS Equal Sector Weight ETF (EQL): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).
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