RYE Increases 13% Month to Date | ETF Trends

The Invesco S&P 500 Equal Weight Energy ETF (RYE) offers investors a unique way to access the U.S. energy market.

The energy sector has been a top performer year to date in 2022, carrying momentum from 2021 when the sector’s returns began outpacing other sectors. RYE has returned 12.6% since October 1 and 43.8% year to date, as of October 17. Over one year, RYE has returned 36.1.24%, according to YCharts.

RYE decreased 9.4% in September, posting steep losses alongside the S&P 500’s decline of 9.6% on a price change basis. The energy sector quickly recovered and regained footing, posting double-digit returns this month to date, while the S&P 500 is up 2.5% during the same period.

RYE tracks an index that equally weights stocks in the energy sector of the S&P 500 Index. RYE has 24 equally weighted holdings, including Occidental Petroleum Corporation (OXY), Targa Resources Corp (TRGP), ConocoPhillips (COP), Hess Corporation (HES), and ONEOK Inc (OKE).

An equal weighting methodology may be particularly appealing in the top-heavy energy industry, where traditional cap weighting can result in significant concentration issues.

Advisors have continued to allocate to the strategy as energy has remained one of the only bright spots in the market, with energy companies projecting sustained growth. The fund has seen $117 million in year-to-date net inflows as of October 14, according to VettaFi.

The energy sector ranks first in average dividend yield, according to VettaFi, making it particularly attractive in the current environment. Equities that pay dividends are typically better positioned in inflationary and recessionary environments than the broader equity market or fixed-income investments. 

RYE carries an expense ratio of 40 basis points and has an annual dividend yield of 1.93%.

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