Under the Hood of Invesco’s Most Popular Equal-Weight Sector ETF | ETF Trends

The Invesco S&P 500 Equal Weight Consumer Discretionary ETF (RCD) was Invesco’s most popular equal-weight sector ETF last month, as measured by June net inflows. 

The S&P 500 EWI outperformed the S&P 500 by 2% during Q2, continuing equal weight’s trailing 12-month relative outperformance, 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.

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.

RCD is linked to an equal-weighted index, 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. 

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.

The fund charges a 40 basis point expense ratio. 

The three equal-weighted sector ETFs in Invesco’s lineup that took in the greatest inflows in June were RCD, the Invesco S&P 500 Equal Weight Utilities ETF (RYU), and the Invesco S&P 500 Equal Weight Health Care ETF (RYH), in that order, according to VettaFi.

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