Is Invesco S&P 100 Equal Weight ETF (EQWL) a Strong Option Right Now?

The Invesco S&P 100 Equal Weight ETF (EQWL) was launched on December 1, 2006. This ETF is designed as a smart beta option, aiming to provide broad exposure to large-cap blend stocks in the market.

Understanding Smart Beta ETFs

The ETF market has often been led by products based on market capitalization-weighted indexes. These types of funds are created to mimic the performance of the market or specific market segments.

Market cap-weighted indexes offer a low-cost and straightforward way to achieve market returns, making them suitable for investors who trust the market's efficiency.

For those investors looking to outperform the market through selective stock picking, smart beta funds present a compelling alternative. These funds focus on tracking strategies that do not rely on market capitalization.

Smart beta strategies often seek out stocks with stronger potential risk-return profiles based on various fundamental factors or a mix of such characteristics.

Among the options in this category, equal weighting, fundamental weighting, and volatility/momentum weighting stand out, though not every method guarantees superior returns over time.

About the Fund and Its Sponsor

Invesco manages EQWL, which has accumulated over $1.06 billion in assets, making it a significant player within the large-cap blend ETF segment. This fund aims to mirror the performance of the Russell Top 200 Equal Weight Index.

The S&P 100 Equal Weight Index gives equal exposure to stocks from the largest 200 companies in the U.S. equity market.

Fees and Expenses

When considering ETFs, expense ratios play a critical role in assessing potential returns. Generally, lower-cost funds can potentially perform better than their pricier counterparts, assuming all other conditions are equal.

This ETF has an annual operating expense ratio of 0.25%, which is comparable to other similar products in its category.

Additionally, EQWL boasts a 12-month trailing dividend yield of 1.86%.

Sector Allocation and Major Holdings

While ETFs are designed to offer diversified exposure—reducing the risk posed by individual stocks—examining a fund's holdings can provide insightful details. Most ETFs offer transparency and release their holdings daily.

In EQWL, the largest sector is Financials, which comprises 17.30% of the portfolio. The next largest sectors are Healthcare and Information Technology.

In terms of specific holdings, Broadcom Inc. (AVGO) makes up about 1.20% of total assets, followed closely by General Electric Co. (GE) and 3M Co. (MMM). Collectively, the top ten holdings account for approximately 11.29% of the total assets managed by the fund.

Performance and Risk Profile

As of March 13, 2025, the Invesco S&P 100 Equal Weight ETF has recorded a year-to-date loss of approximately -0.09%, while it has gained around 11.48% over the past 12 months. The ETF has traded within a range of $90.17 to $108.28 in the last year.

With a beta of 0.96 and a standard deviation of 15.11% over the last three years, EQWL reflects a medium-risk profile within its category. The fund is diversified across 102 holdings, effectively mitigating risks tied to individual stocks.

Other Investment Choices

For investors aiming to outperform the large-cap blend market segment, the Invesco S&P 100 Equal Weight ETF presents a solid option. However, several alternatives in this market may also be worth considering.

The Vanguard S&P 500 ETF (VOO) and the SPDR S&P 500 ETF (SPY) both track the S&P 500 Index and have substantial assets, with VOO at $584.98 billion and SPY at $591.07 billion. VOO offers a lower expense ratio of 0.03%, while SPY charges 0.09%.

For those looking for cost-effective and less risky choices, traditional market cap-weighted ETFs that aim to follow the large-cap blend market returns might be more appealing.

Final Thoughts

If you’re interested in exploring this product or other ETFs, consider looking for options that align with your investment goals. Staying informed about the latest developments in the ETF landscape can also be beneficial.

ETF, Investing, Market