Should You Invest in the Invesco S&P 500 Equal Weight Materials ETF (RSPM)?
Looking for broad exposure to the Materials - Broad segment of the equity market? You should consider the Invesco S&P 500 Equal Weight Materials ETF (RSPM), a passively managed exchange traded fund launched on 11/01/2006.
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.
Additionally, sector ETFs offer convenient ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. Materials - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 3, placing it in top 19%.
Index Details
The fund is sponsored by Invesco. It has amassed assets over $296.22 million, making it one of the average sized ETFs attempting to match the performance of the Materials - Broad segment of the equity market. RSPM seeks to match the performance of the S&P 500 EQUAL WEIGHT MATERIALS INDEX before fees and expenses.
The S&P 500 Equal Weight Materials Index equally weights stocks in the materials sector of the S&P 500 Index.
Costs
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are the same.
Annual operating expenses for this ETF are 0.40%, making it one of the cheaper products in the space.
It has a 12-month trailing dividend yield of 1.91%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Materials sector--about 100% of the portfolio.
Looking at individual holdings, Freeport-Mcmoran Inc (FCX) accounts for about 4.16% of total assets, followed by Steel Dynamics Inc (STLD) and Eastman Chemical Co (EMN).
The top 10 holdings account for about 37.63% of total assets under management.
Performance and Risk
The ETF return is roughly 7.75% and was up about 16.27% so far this year and in the past one year (as of 05/08/2024), respectively. RSPM has traded between $28.92 and $36.38 during this last 52-week period.
The ETF has a beta of 1.14 and standard deviation of 20.27% for the trailing three-year period. With about 29 holdings, it has more concentrated exposure than peers.
Alternatives
Invesco S&P 500 Equal Weight Materials ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, RSPM is a sufficient option for those seeking exposure to the Materials ETFs area of the market. Investors might also want to consider some other ETF options in the space.
Materials Select Sector SPDR ETF (XLB) tracks Materials Select Sector Index and the FlexShares Morningstar Global Upstream Natural Resources ETF (GUNR) tracks Morningstar Global Upstream Natural Resources Index. Materials Select Sector SPDR ETF has $5.63 billion in assets, FlexShares Morningstar Global Upstream Natural Resources ETF has $6.67 billion. XLB has an expense ratio of 0.09% and GUNR charges 0.46%.
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 Materials ETF (RSPM): ETF Research Reports
Steel Dynamics, Inc. (STLD) : Free Stock Analysis Report
Freeport-McMoRan Inc. (FCX) : Free Stock Analysis Report
Eastman Chemical Company (EMN) : Free Stock Analysis Report
Materials Select Sector SPDR ETF (XLB): ETF Research Reports
FlexShares Morningstar Global Upstream Natural Resources ETF (GUNR): ETF Research Reports
