Markets retreated in February, as the S&P 500 clawed back some of its January gains.
In February, three Invesco equal weight sector ETFs saw notable inflows. Equal weight strategies offer a more balanced approach to top-heavy sectors, reducing concentration risk. By giving each security an equal weight at every quarterly rebalance, the strategies are limiting the impact just a handful of names can have on the fund.
Equal weight funds bring factor tilts to portfolios as the strategies learn toward smaller, more undervalued companies than its average category peer. Investors often opt for an equal-weighted fund to remove size bias from a portfolio.
The Invesco S&P 500 Equal Weight Technology ETF (RYT) saw $176 million in net flows in February, ending the month with $2.5 billion in assets under management. RYT is based on the S&P 500 Equal Weight Information Technology Index,
The S&P 500 Equal Weight Information Technology Index covers the following industries: internet equipment, computers and peripherals, electronic equipment, office electronics and instruments, semiconductor equipment and products, diversified telecommunication services, and wireless telecommunication services.
The Invesco S&P 500 Equal Weight Industrials ETF (RGI) and the Invesco S&P 500 Equal Weight Consumer Discretionary ETF (RCD) each took in $25 in net flows in February. RGI has $370 million in assets under management and RCD has $622 million in assets.
RGI tracked the S&P 500 Equal Weight 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.
RCD is based on the S&P 500 Equal Weight Consumer Discretionary Index. 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.
The Invesco equal weight sector ETFs charge 40 basis points.
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