Designed to provide broad exposure to the Energy ETFs category of the market, the Invesco S&P 500 Equal Weight Energy ETF (RSPG) is a smart beta exchange traded fund launched on 11/01/2006.

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.

However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.

By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.

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

RSPG is managed by Invesco, and this fund has amassed over $547.26 million, which makes it one of the larger ETFs in the Energy ETFs. RSPG, before fees and expenses, seeks to match the performance of the S&P 500 EQUAL WEIGHT ENERGY PLUS INDEX .

The S&P 500 Equal Weight Energy Plus Index equally weights stocks in the energy sector of the S&P 500 Index.

Cost & Other Expenses

Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.

Annual operating expenses for RSPG are 0.40%, which makes it one of the cheaper products in the space.

It has a 12-month trailing dividend yield of 2.48%.

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.

RSPG's heaviest allocation is in the Energy sector, which is about 100% of the portfolio.

When you look at individual holdings, Schlumberger Nv (SLB) accounts for about 4.71% of the fund's total assets, followed by Baker Hughes Co (BKR) and Diamondback Energy Inc (FANG).

RSPG's top 10 holdings account for about 46.4% of its total assets under management.

Performance and Risk

So far this year, RSPG return is roughly 14.89%, and is up about 14.37% in the last one year (as of 11/15/2024). During this past 52-week period, the fund has traded between $69.70 and $86.08.