While broader markets fell in August, investors strategically allocated to certain sectors.
The three equal-weighted sector ETFs in Invesco’s lineup that took in the greatest inflows during August were the Invesco S&P 500 Equal Weight Consumer Discretionary ETF (RCD), the Invesco S&P 500 Equal Weight Consumer Staples ETF (RHS), and the Invesco S&P 500 Equal Weight Industrials ETF (RGI).
An equal-weight strategy can provide diversification benefits and reduce concentration risk by weighting each constituent company equally so that a small group of companies does not have an outsized impact on the index.
RCD, which has $370 million in assets under management, took in $64 million in August inflows, offsetting outflows seen earlier in the year, with the fund seeing $18 million in year-to-date inflows, according to VettaFi.
RCD offers exposure to the consumer discretionary sector of the domestic economy, making it one option available to investors implementing sector rotation strategies or looking to tilt exposure towards a high beta industry, perhaps in anticipation of a bull market.
RHS took in $35 million in August, with year-to-date inflows now at $194 million. The fund has $662 million in assets under management.
RHS offers exposure to the consumer staples sector of the U.S. economy, but with a unique twist: the fund tracks an equal-weighted index, meaning that component companies receive approximately equal allocations. That results in exposure that is considerably more balanced than other alternatives.
RGI took in $34 million in August. The $340 million fund has seen $91 million in net outflows year to date.
This ETF offers exposure to equities included in the S&P 500 Industrials Index, which covers the following industries: aerospace and defense, building products, construction and engineering, electrical equipment, conglomerates, machinery; commercial services and supplies, air freight and logistics, airlines, and marine, road and rail transportation infrastructure.
RGI is different from other funds because it employs a unique equal-weighted strategy, meaning that component companies receive approximately equal allocations. That results in exposure that is considerably more balanced than other alternatives.
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