ETF Trends
ETF Trends

The ALPS Equal Sector Weight (NYSEArca: EQL) is getting a lower expense ratio. Denver-based ALPS said EQL’s new expense ratio will be 0.30% per year, down from 0.54%.

In addition, EQL received an Overall 4 Star Morningstar Rating as of February 28, 2015 against 34 of U.S. ETF Large Blend Funds based on risk adjusted returns, according to a statement issued by ALPS.

EQL applies equal weighting to the nine sector SPDR ETFs from State Street Global Advisors. The ETF debuted in July 2009 and had $144.6 million in assets under management as of March 31.

Weights for EQL’s holdings range from 10.88% for the Health Care Select Sector SPDR (NYSEArca: XLV) to 11.33% for the Energy Select Sector SPDR (NYSEArca: XLE).

“Although equal weighting of sectors can result in faster or slower earnings growth versus the S&P500 in any single year, profitability is similar on average. However equal-weighting aims to systematically avoid the excesses of the cap-weighted benchmark (such as the Financial crisis and the Tech bubble before that) making it ideal for “set-it-and-forget-it” investors who prefer somewhat less volatile returns,” said AltaVista Research in a recent research note. [All Sectors the Equal-Weight Way]

EQL rebalances on a quarterly basis.

ALPS Equal Sector Weight ETF

ETF Trends editorial team contributed to this article.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.