As I’m sure is obvious by now, the market has been experiencing a major shift as of late. Several political, economic and consumer factors have caused the market to lose the attraction it showed last year for mega-cap technology stocks that previously dominated it.
Now, while this is a huge shift, it doesn’t have to be a bad one. We are entering what appears to be a broadening market, one where several sectors are experiencing strong earnings growth instead of just a select few. And, as with many market shifts, we can play this to our advantage.
One of the best ways to capitalize on the broadening market is through the Invesco Russell 1000 Equal Weight ETF (EQAL). In an equal weight exchange-traded fund (ETF) such as EQAL, each sector represented receives equal weight, and each stock within said sectors also receives equal weight.
EQAL specifically offers an equal-weighted take on the Russell 1000, which consists of the 1,000 largest U.S. stocks. This approach produces a big tilt away from the mega-cap stocks and toward the mid-cap and smaller stocks.
EQAL has $611.98 million in assets under management and an expense ratio of 0.20%. It’s also rebalanced annually. Its top holdings include AT&T Inc (NYSE: T), Liberty Broadband Corp. (NASDAQ: LBRDK), Roku, Inc. (NASDAQ: ROKU), Iridium Communications Inc. (NASDAQ: IRDM), Verizon Communications Inc. (NYSE: VZ) and Juniper Networks, Inc. (NYSE: JNPR).
Chart courtesy of Stockcharts.com.
The fund fell 3.41% for the last month, 1.45% in the past three months and 1.45% year to date.
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.
