The S&P 500 EWI outperformed the S&P 500 by 2% during Q2, continuing equal weight’s trailing 12-month relative outperformance, with key performance contributors for equal weight in the second quarter being the underweight to communication services and the overweight to utilities, according to S&P Dow Jones Indices.
Eight out of 11 equal-weight sectors outperformed their cap-weighted counterparts during the second quarter. The sectors in which the EWI trailed its cap-weighted counterpart were healthcare, energy, and real estate, which underperformed by 0.2%, 1.9%, and 2.1%, respectively.
This momentum is continuing from a strong first quarter, in which the S&P 500 EWI outperformed the S&P 500 by 2% during the first three months of the year, according to S&P Dow Jones Indices U.S. Equal Weight Sector Dashboard.
The three equal-weighted sector ETFs in Invesco’s lineup that took in the greatest inflows were the Invesco S&P 500 Equal Weight Consumer Discretionary ETF (RCD), the Invesco S&P 500 Equal Weight Utilities ETF (RYU), and the Invesco S&P 500 Equal Weight Health Care ETF (RYH).
RCD, which has $301 million in assets under management, took in $34 million in June inflows, partially offsetting outflows seen earlier in the year, which now total $30 million in net outflows year-to-date, 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, according to VettaFi.
RYU saw $29 million in net inflows in June and $155 million in net inflows year-to-date. The fund has $372 million in total assets, according to VettaFi.
This ETF offers exposure to equities included in the S&P 500 Equal Weighted Utilities Index, which covers the following industries: electric utilities, gas utilities, multi-utilities and unregulated power and water utilities, telecommunication service companies, including fixed-line, cellular, wireless, high bandwidth, and fiber-optic cable networks, according to VettaFi.
RYH, with $874 million in assets under management, saw $10 million in June inflows, bringing the total year to date inflows to $26 million, according to VettaFi.
RYH offers exposure to the domestic healthcare industry and it uses an alternative strategy to access this lucrative asset class. The fund follows the S&P 500 Equal Weighted Health Care Index, which offers more balanced exposure for the long-term investor since it has the added benefit of avoiding the potentially adverse impact of rallies or crashes in a specific sub-industry within healthcare.
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