Equal Weight Utilities Increase as Constellation Energy Jumps 16% | ETF Trends

Constellation Energy Corporation topped the list of Thursday’s best performing constituents in the S&P 500 index. 

Shares of Constellation Energy are trading up 16.3% in mid-day trading Thursday. Year to date, Constellation Energy has increased 53.7%.

The supplier of energy products and services declared a quarterly dividend of $0.141 per share on Tuesday, according to a statement from the firm, in line with the previous quarter. 

While Constellation Energy is the largest producer of carbon-free energy in the U.S., most cap-weighted utilities funds are underexposed to security. Constellation Energy just makes its way into the top 20 largest utility companies by market cap. Investors who are looking for more exposure should consider the Invesco S&P 500 Equal Weight Utilities ETF (RYU)

RYU is different from other ETFs offering exposure to the S&P 500 utilities sector 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, and a methodology that some investors believe will add value over the long haul, according to VettaFi.

In RYU, Constellation Energy Group is weighted at 3.25%, giving it equal representation as the larger utilities companies. However, in a cap-weighted fund, the security is weighted around 1.81%, with the largest companies dominating the index. 

RYU offers exposure to equities included in the S&P 500 Utilities Index, which covers the following industries: electric utilities, gas utilities, multi-utilities, unregulated power, water utilities, telecommunication service companies, including fixed-line, cellular, wireless, high bandwidth, and fiber-optic cable networks.

The fund was the second most popular equal weight sector ETF offered by Invesco in June, as measured by net inflows. RYU saw $10 million in net inflows last month and has seen $160 million in year-to-date inflows through July 26. 

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