March was a promising month for investors who held onto their equities despite substantial market declines earlier in the year.
The Invesco S&P 500 Equal Weight ETF (RSP) saw $956 million in net inflows in March, bringing the year-to-date net flows up to $3.2 billion, according to ETF Database. The fund returned 3% over a one-month period, a welcomed turnaround from the turbulence experienced in January and February that was spurred by inflation, rising rates, and escalating geopolitical tensions.
RSP was Invesco’s second most popular ETF in March, trailing only the Invesco QQQ ETF (QQQ), which topped the charts and beat out all other ETFs available to U.S. investors in terms of monthly inflows, signaling that growth stocks may be falling back into favor.
RSP is linked to an equal-weighted index, meaning that component companies receive approximately equal allocations. This results in exposure that is considerably more balanced than other alternatives, and a methodology that has often resulted in outperformance.
RSP, with $34.7 billion in AUM, was the most popular equal-weight ETF strategy available to investors in March — a fact that is not really surprising considering that it is the largest equal-weighted ETF on the market.
RSP, or the Invesco ESG S&P 500 Equal Weight ETF (RSPE), which integrates ESG criteria into the 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.
The funds have also demonstrated strong returns and a tilt toward smaller value companies, making both offerings uniquely attractive in the current environment.
Both RSP and RSPE charge a 20 basis point expense ratio, according to ETF Database.
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