Weakness in ALPS Equal Sector Weight ETF's People and Process Pillar ratings limits this strategy to a Morningstar Medalist Rating of Neutral. The portfolio maintains a cost advantage over competitors, priced within the least expensive fee quintile among peers.  

 The equity team managing the passive strategy earns a Below Average People Pillar. The strategy gets a Below Average Process Pillar rating, after a recent downgrade from Average.  High liquidity exposure is attributed to stocks with a high trading volume, lending managers more flexibility. And a low quality exposure is rooted in stocks with higher financial leverage and lower profitability. Even though the strategy's parent organization has some investor-friendly attributes like portfolio managers who invest a substantial amount in their strategy, portfolio managers with modest tenures holds it back. As a result, the firm obtains a Low Parent Pillar.

Analyst Rating

Utilities Select Sector SPDR Fund

Energy Select Sector SPDR Fund

Communication Services Select Sector SPDR Fund

Industrial Select Sector SPDR Fund

Consumer Staples Select Sector SPDR Fund

Consumer Discretionary Select Sector SPDR Fund

Financial Select Sector SPDR Fund

Materials Select Sector SPDR Fund

Technology Select Sector SPDR Fund

Health Care Select Sector SPDR Fund

Morningstar's evaluation of this security's process aims to determine the likelihood that it will outperform its Morningstar Category index on a risk-adjusted basis over the long term. ALPS Equal Sector Weight ETF earns a Below Average Process Pillar rating. The process is bolstered by tracking an index. Historical data, like Morningstar's Active/Passive Barometer, finds that passively managed funds have generally outperformed their active counterparts, especially over longer time horizons. However, the rating is weakened by the fund's unremarkable long-term risk-adjusted performance. This can be seen in its five-year alpha calculated relative to the category index, which suggests that the process has struggled over that period. The parent firm's five-year retention rate of 64% also limits the process.

The investment strategy as stated in the fund's prospectus is:  The investment seeks investment results that replicate as closely as possible, before fees and expenses, the performance of the NYSE® Equal Sector Weight Index (the "underlying index").  In order to track the underlying index, the fund will use a "fund of funds" approach, and and seek to achieve its investment objective by investing at least 90% of its total assets in the shares of the Underlying Sector ETFs. The underlying index is an index of ETFs comprised of all active Select Sector SPDR® ETFs in an equal weighted portfolio. It is non-diversified. 

 The portfolio is overweight in utilities and real estate relative to the category average by 7.2 and 6.9 percentage points, respectively. The sectors with low exposure compared to category peers are technology and financial services, underweight the average by 18.2 and 4.6 percentage points of assets, respectively. The strategy owns 12 securities and is relatively concentrated. In particular, 91.0% of the strategy's assets are housed within the top 10 holdings, compared with the category’s 49.5% average. And in closing, in terms of portfolio turnover, this portfolio turns over its holdings less quickly than peers, potentially leading to lower costs for investors and eliminating a drag on performance.

Below Average

Process

ALPS’s equity team earns a Below Average People Pillar rating. The team benefits from the portfolio managers' outperformance of peers at the funds they run, as measured by their combined three-year manager excess returns. However, the rating is weakened by the parent firm's five-year success ratio of 41%. The measure indicates the percentage of a firm's funds that survived and beat their respective category's median return for the period. The parent's relatively low success ratio suggests that the firm could do better across its fund lineup. The parent firm's five-year retention rate of 64% also weakens the team.

People

ALPS has a ways to go to become an industry-standard steward, resulting in a Low Parent Pillar rating. Aside from the overall view, portfolio managers at ALPS have made a notable effort to align their interests with shareholders' by taking a personal stake and investing alongside them. Nearly 41% of the firm’s assets are represented by a manager who invests in their respective product. With an average asset-weighted tenure of eight years among the longest-tenured managers at ALPS, the firm is on par with peers. Seasoned teams tend to have more experience to draw upon should they need to weather turbulent market conditions. The firm charges fees on its open-end and exchange-traded funds that are on par with category peers. On average, fund fees on its products fall in the middle quintile, giving it neither an advantage nor disadvantage compared with the competition.

Parent

ALPS Equal Sector Weight ETF

EQL tracks an equal-weighted index of all select sector SPDR ETFs.

Tired of the month-to-month back and forth in stock market narratives? The last few years' worth of Fed watching has taken up quite a bit of oxygen, distracting from longer-term portfolio construction questions.

The Long-Term Case for Equal Weight ETF EQL

Designed to provide broad exposure to the Large Cap Blend segment of the US equity market, the ALPS Equal Sector Weight ETF (EQL) is a passively managed exchange traded fund launched on 07/07/2009.

Should ALPS Equal Sector Weight ETF (EQL) Be on Your Investing Radar?

Making its debut on 07/07/2009, smart beta exchange traded fund ALPS Equal Sector Weight ETF (EQL) provides investors broad exposure to the Style Box - Large Cap Blend category of the market.

Is ALPS Equal Sector Weight ETF (EQL) a Strong ETF Right Now?

Capital markets appear content with playing the rate cut waiting game as the S&P 500 continues to rise to new highs. Meanwhile, renewed volatility could make investors reconsider adding an equal weight strategy to their portfolios.

Consider an Equal Weight Strategy Amid Renewed Volatility

SPDR S&P 500 ETF Trust

A new year brings a new set of factors for investors to consider. One can't ignore the way 2023 ended, particularly given the big back and forth between high interest rates and inflation.

Eye An Equal Weight ETF Approach to Start 2024

Invesco S&P 500 Equal Weight ETF

Equal weighting at the sector level has provided compelling returns and diversification benefits for investors. Strategies that provide equal exposure to every security in a benchmark have garnered significant investor interest in recent years.

Sector Equal Weighting Outperforms Equal Weighting at Stock Level

The EQL ETF invests across the eleven sectors of the S&P 500 in an equal proportion. The strategy's distinct sector tilt balances risks while still capturing high-level market trends. We believe EQL can work as a portfolio diversifier to complement a more traditional equities allocation.

EQL: A Unique Portfolio Diversifier In The Current Market Environment

The final quarter of the 2023 calendar year is rapidly approaching, and with it comes an opportunity for investors to revisit their portfolios. The year has offered a series of challenges and sources of uncertainty, with concentration risk and inflation key.

Eye Equal-Weight ETF EQL to End 2023

Looking for a strategy that can mitigate some of the big risks impacting the S&P 500? The equal weight ETF EQL may offer one intriguing tool to do so.

Equal Weight ETF EQL Hits Key Buy Signal

Concentration risk is the name of the game right now for those looking at the S&P 500. The culprits include the mega-cap tech firms like Amazon (AMZN), Nvidia (NVDA), and Microsoft (MSFT).

Consider EQL for Concentration Risk Allocation

ETF milestones often focus on track records by themselves, but that can miss out on other key indicators. Ideally, investors and advisors would look for a strategy that combines outperformance with serious liquidity when perusing ETFs.

Equal Sector Weight ETF EQL Hits $300 Million

The EQL ETF provides equal-weight exposure to the large-cap sectors via Select Sector SPDR ETFs. Over the long run, the EQL ETF has underperformed market ETFs like the SPDR S&P 500 Trust ETF. With the invention of fractional shares, investors can simply replicate EQL's strategy of holding quarterly rebalanced SPDR ETFs and save on the management fees.

EQL: Easily Replicable Strategy; Save The Management Fees And Avoid

One of the big stories so far this year for the markets has been the somewhat striking performance of the S&P 500.

Go Deep on Equal Weight ETF, SPY Competitor EQL

Technical indicators can be a powerful tool for investors, helping identify signals in noisy markets. While not the be-all, end-all of understanding investments, they can help show investors when a notable change has taken place – and that's just what's happened recently for a notable equal-weight ETF, the Alps Equal Sector Weight ETF (EQL).

This Equal-Weight ETF Is Signaling a Buy

The ALPS Equal Sector Weight ETF (EQL) offers unique exposure to the U.S. equity market.

How Does EQL Compare to SPY?

The market rally that began in late 2022 and into early 2023 has lost some of its mojo thanks to inflation and rising interest rate fears. That's causing more market volatility than investors were familiar with last year, but there are ways to brace for more market movements, including the use of an equal-weight strategy.

Brace for More Market Volatility With This Equal-Weight ETF

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This article summarizes the performance of the entire U.S. equity market by examining 1Y, 3Y, 5Y, and 10Y returns for 850+ ETFs across 40 categories. Major indices declined, but investing in Energy, High-Dividend, and Large-Cap Value ETFs softened the blow. Meanwhile, searching for the bottom in mega-cap growth and thematic ETFs didn't work.

U.S. Equity ETFs: The Best And Worst Of 2022

Equal weight strategies performed exceptionally well on a relative basis last year when compared to the S&P 500. The ALPS Equal Sector Weight ETF (EQL) is designed to offer more balanced exposure to the U.S. equity market than funds tracking the S&P 500, such as the SPDR S&P 500 ETF Trust (SPY).

EQL Outperforms S&P 500 in 2022

An equal weight strategy's inherent factor tilt toward small-size companies has led to the methodology's impressive outperformance year to date — but the methodology is also paying off during longer periods of time.

EQL Outperforms S&P 500 Over 3-Year Period

O'Shares US Small-Cap Quality Dividend ETF

Markets continued to recover in November, with global equities and government bonds rallying during the month on softer U.S. inflation data and expectations the Chinese government would relax its zero-COVID policy. While risk appetite improved in November, investors were still looking to quality, more balanced strategies for their U.S. equity exposure.

EQL and OUSM Lead in November Flows Across ALPS' ETFs

ALPS Sector Dividend Dogs ETF

U.S. equity ETFs the ALPS Sector Dividend Dogs ETF (SDOG) and the ALPS Equal Sector Weight ETF (EQL) are two of ALPS' most popular ETFs in 2022, as measured by inflows year to date.  SDOG and EQL notably both utilize an equal weight methodology but focus on different aspects of the U.S. equity market.

Investors Look to SDOG and EQL for U.S. Equity Exposure

Leading by five-year returns in ALPS' lineup of ETFs is the ALPS Equal Sector Weight ETF (EQL), which offers unique exposure to the domestic equity market. EQL has returned 56.6% over a five-year period.

EQL Is ALPS' Top ETF By 5-Year Returns

An equal weight strategy will often outperform its market cap-weighted peers, further demonstrated by the year-to-date relative outperformance of the ALPS Equal Sector Weight ETF (EQL).

Equal Weight Strategy EQL Outperforms SPY by 5% YTD

The ALPS Equal Sector Weight ETF (EQL) provides unique exposure to the U.S. equity market.  EQL utilizes a fund-of-funds ETF structure, delivering exposure to the U.S. Large Cap Equity market by investing equal proportions in 11 Select Sector SPDRs.

How Does EQL's Exposure Compare to SPY?

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The recovery rally staged by U.S. equities in July reversed course in August, with all major indexes posting losses for the month.

News for ALPS Equal Sector Weight ETF ETF (EQL)