“The two most powerful warriors are patience and time.”
–Leo Tolstoy
In the midst of the market chaos fueled by President Trump’s tariffs, investors must stay calm and collected. The trade war requires warriors like us to remain patient.
When it comes to timing, the markets are very volatile right now, with retaliatory tariffs and heightened tensions with countries in the European Union and China. Because of this, investing in exchange-traded funds (ETFs) might be more attractive to investors who still want exposure to large companies that they can be patient with, without taking the risk of trying to pick which ones will be winners.
The S&P 500 is an attractive index to tap into due to its history of positive returns and the variety of sectors it invests in. The Invesco S&P 500 Revenue ETF (RWL) may just be the right choice for investor-warriors who have the patience for long-term investing.
RWL is a revenue-weighted ETF, which weighs its holdings based on revenue generated by the companies, rather than market capitalization. Investors can have their hand in some of the largest companies on the market without having to place all their eggs in one basket.
The fund seeks to track the investment results of the S&P 500 Revenue-Weighted Index. No company in its holdings makes up more than 5%, with the top 10 holdings making up only 23.70% of total assets.
The top holdings include Walmart Inc. (NYSE: WMT), Amazon.com, Inc. (NASDAQ: AMZN), UnitedHealth Group Incorporated (NYSE: UNH), Apple Inc. (NASDAQ: AAPL), Berkshire Hathaway Inc. (NYSE: BRK-B), CVS Health Corporation (NYSE: CVS), Exxon Mobil Corporation (NYSE: XOM), McKesson Corporation (NYSE: MCK), Cencora, Inc. (NYSE: COR) and JPMorgan Chase & Co. (NYSE: JPM).
Chart Courtesy of www.stockcharts.com
Since it mimics the revenue-producing securities of the S&P 500, this ETF, like many other funds in the market right now, shows a clear dip in the chart above. However, RWL invests in several sectors and large companies, so when the market rebounds after this madness, it could yield long-term profits.
The ETF and Index are rebalanced quarterly, with net assets of $5.32 billion and a price-to-earnings (P/E) ratio of 17.
Anyone interested in a fund should consider its holdings and purpose to ensure it fits one’s goals and personal risk tolerance before buying any new investment. That process is part of the due diligence that should be performed before adding any stock, fund or ETF to one’s portfolio.
As always, I am happy to answer any of your questions about ETFs, so do not hesitate to send me an email. You just may see your question answered in a future ETF Talk.
