Launched on 11/01/2006, the Invesco S&P 500 Equal Weight Health Care ETF (RSPH) is a passively managed exchange traded fund designed to provide a broad exposure to the Healthcare – Broad segment of the equity market.
While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.
Investor-friendly, sector ETFs provide many options to gain low risk and diversified exposure to a broad group of companies in particular sectors. Healthcare – Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 4, placing it in top 25%.
The fund is sponsored by Invesco. It has amassed assets over $844.58 million, making it one of the larger ETFs attempting to match the performance of the Healthcare – Broad segment of the equity market. RSPH seeks to match the performance of the S&P 500 EQUAL WEIGHT HEALTH CARE INDEX before fees and expenses.
The S&P 500 Equal Weight Health Care Index equally weights stocks in the health care sector of the S&P 500 Index.
Expense ratios are an important factor in the return of an ETF and in the long term, cheaper funds can significantly outperform their more expensive counterparts, other things remaining the same.
Annual operating expenses for this ETF are 0.40%, making it one of the cheaper products in the space.
It has a 12-month trailing dividend yield of 0.76%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund’s holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Healthcare sector–about 100% of the portfolio.
Looking at individual holdings, Unitedhealth Group Inc (UNH) accounts for about 1.73% of total assets, followed by Centene Corp (CNC) and Cvs Health Corp (CVS).
The top 10 holdings account for about 16.82% of total assets under management.
Performance and Risk
The ETF has lost about -11.65% and is down about -6.42% so far this year and in the past one year (as of 10/30/2023), respectively. RSPH has traded between $25.34 and $30.58 during this last 52-week period.
The ETF has a beta of 0.86 and standard deviation of 16.41% for the trailing three-year period. With about 68 holdings, it effectively diversifies company-specific risk.
Invesco S&P 500 Equal Weight Health Care ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, RSPH is a good option for those seeking exposure to the Health Care ETFs area of the market. Investors might also want to consider some other ETF options in the space.
Vanguard Health Care ETF (VHT) tracks MSCI US Investable Market Health Care 25/50 Index and the Health Care Select Sector SPDR ETF (XLV) tracks Health Care Select Sector Index. Vanguard Health Care ETF has $15.51 billion in assets, Health Care Select Sector SPDR ETF has $35.84 billion. VHT has an expense ratio of 0.10% and XLV charges 0.10%.
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report