Is Invesco S&P 500 Equal Weight Health Care ETF (RSPH) a Strong ETF Right Now?
Making its debut on 11/01/2006, smart beta exchange traded fund Invesco S&P 500 Equal Weight Health Care ETF (RSPH) provides investors broad exposure to the Health Care ETFs 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.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
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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.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.
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
The fund is managed by Invesco. RSPH has been able to amass assets over $751.46 million, making it one of the larger ETFs in the Health Care ETFs. Before fees and expenses, RSPH seeks to match the performance of the S&P 500 EQUAL WEIGHT HEALTH CARE INDEX .
The S&P 500 Equal Weight Health Care Index equally weights stocks in the health care 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.
Operating expenses on an annual basis are 0.40% for this ETF, which makes it on par with most peer products in the space.
RSPH's 12-month trailing dividend yield is 0.75%.
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.
RSPH's heaviest allocation is in the Healthcare sector, which is about 100% of the portfolio.
When you look at individual holdings, Cardinal Health Inc (CAH) accounts for about 2.02% of the fund's total assets, followed by Dexcom Inc (DXCM) and Cencora Inc (COR).
The top 10 holdings account for about 19.26% of total assets under management.