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Should You Invest in the Invesco S&P 500 Equal Weight Industrials ETF (RGI)?

Zacks Equity Research

Launched on 11/01/2006, the Invesco S&P 500 Equal Weight Industrials ETF (RGI) is a passively managed exchange traded fund designed to provide a broad exposure to the Industrials - Broad segment of the equity market.

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.

Sector ETFs are also funds of convenience, offering many ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. Industrials - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 16, placing it in bottom 0%.

Index Details

The fund is sponsored by Invesco. It has amassed assets over $243.70 M, making it one of the average sized ETFs attempting to match the performance of the Industrials - Broad segment of the equity market. RGI seeks to match the performance of the S&P 500 Equal Weight Industrials Index before fees and expenses.

This index is an unmanaged equal weighted version of the S&P 500 Industrials Index that consists of the common stocks of the following industries: aerospace & defense, building products, construction & engineering, electrical equipment, conglomerates, machinery; commercial services & supplies, air freight & logistics, airlines, marine, road & rail transportation infrastructure.

Costs

When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.

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 1.42%.

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.

This ETF has heaviest allocation in the Industrials sector--about 100% of the portfolio.

Looking at individual holdings, General Electric Co (GE) accounts for about 1.68% of total assets, followed by United Rentals Inc (URI) and Rockwell Automation Inc (ROK).

The top 10 holdings account for about 16.22% of total assets under management.

Performance and Risk

Year-to-date, the Invesco S&P 500 Equal Weight Industrials ETF has added about 32.52% so far, and was up about 25.32% over the last 12 months (as of 12/13/2019). RGI has traded between $96.98 and $135.51 in this past 52-week period.

The ETF has a beta of 1.21 and standard deviation of 15.26% for the trailing three-year period, making it a medium risk choice in the space. With about 69 holdings, it effectively diversifies company-specific risk.

Alternatives

Invesco S&P 500 Equal Weight Industrials 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, RGI is a good option for those seeking exposure to the Industrials ETFs area of the market. Investors might also want to consider some other ETF options in the space.

Vanguard Industrials ETF (VIS) tracks MSCI US Investable Market Industrials 25/50 Index and the Industrial Select Sector SPDR Fund (XLI) tracks Industrial Select Sector Index. Vanguard Industrials ETF has $3.69 B in assets, Industrial Select Sector SPDR Fund has $10.74 B. VIS has an expense ratio of 0.10% and XLI charges 0.13%.

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 Industrials ETF (RGI): ETF Research Reports
 
United Rentals, Inc. (URI) : Free Stock Analysis Report
 
General Electric Company (GE) : Free Stock Analysis Report
 
Industrial Select Sector SPDR Fund (XLI): ETF Research Reports
 
Vanguard Industrials ETF (VIS): ETF Research Reports
 
Rockwell Automation, Inc. (ROK) : Free Stock Analysis Report
 
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