Invesco ESG S&P 500 Equal Weight ETF’s Process Pillar rating is Average, but a strong management team still helps this strategy retain its Morningstar Medalist Rating of Bronze. The portfolio maintains a sizable cost advantage over competitors, priced within the cheapest fee quintile among peers.  

 The strategy’s management team earns an Above Average People Pillar rating. The strategy merits an Average Process Pillar rating. Independent of the rating, analysis of the strategy's portfolio shows it has maintained a significant overweight position in liquidity exposure and has an overweight in volatility exposure compared with category peers. High liquidity exposure is attributed to stocks with a high trading volume, lending managers more flexibility. And high volatility exposure is rooted in stocks that have a higher standard deviation of returns. The strategy's parent organization earns the firm an Average Parent Pillar rating. People Pillar and Parent Pillar ratings for this strategy are indirectly assigned by a Morningstar analyst rather than algorithmically derived. Please see the notes following each pillar section for more details. The details of assigning methods can be found in each pillar section.

Analyst Rating

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NVIDIA

Hasbro

Boston Scientific

Morningstar's evaluation of this security's process aims to determine the likelihood that it will outperform its Morningstar Category benchmark on a risk-adjusted basis over the long term. Invesco ESG S&P 500 Equal Weight ETF earns an Average Process Pillar rating. The most substantial contributor to the rating is that this fund tracks an index. Historical data, such as Morningstar's Active/Passive Barometer, finds that passively managed funds have generally outperformed their active counterparts, especially over longer time horizons. The size of the portfolio management team also supports the rating. With four portfolio managers, the fund is reasonably well-resourced. Lastly, the process is limited by the parent firm's five-year risk-adjusted success ratio of 44%. The measure indicates the percentage of a firm's funds that survived and beat their respective category's median Morningstar Risk-Adjusted Return for the period. The parent's subpar success ratio suggests that the firm could do better across its fund lineup.

The investment strategy as stated in the fund's prospectus is:  The investment seeks to track the investment results of the S&P 500 Equal Weight ESG Leaders Select Index.  The fund generally will invest at least 90% of its total assets in the securities that comprise the underlying index. The underlying index is designed to measure the equal weighted performance of securities included in the S&P 500 Equal Weight Index (the “Parent Index”) that also meet the index provider’s environmental, social and governance (“ESG”) criteria, and while maintaining similar overall industry group weights as the parent index. The parent index consists of all of the components of the S&P 500 Index. The fund is non-diversified. 

 The portfolio is overweight in consumer cyclical and industrials relative to the category average by 4.2 and 4.0 percentage points, respectively. The sectors with low exposure compared to category peers are energy and financial services, underweight the average by 8.1 and 4.0 percentage points of assets, respectively. The portfolio is composed of 184 holdings and its assets are more dispersed than peers in the category. In particular, 6.1% of the portfolio's assets are concentrated in the top 10 fund holdings, as opposed to the category average's 27.4%. And in closing, in terms of portfolio turnover, on a year-over-year basis, 33% of the fund's holdings have turned over, whether through increasing, decreasing, or changing a position.

Average

Process

Invesco’s team is strong compared with others in the industry, resulting in an Above Average People Pillar rating. There are four managers listed on the fund: Peter Hubbard, Michael Jeanette, Pratik Doshi, Tony Seisser. The team is well equipped, with an average of 10 years of portfolio management experience. Together, they manage a total of five strategies, with solid long-term prospects. The strategies average a Bronze asset-weighted Morningstar Medalist Rating, indicating a position to deliver positive alpha relative to the category median in aggregate.  

 Note: This People Pillar rating is indirectly assigned by an analyst. Morningstar analysts evaluate the People Pillar for passive products at the brand level and may also differentiate by asset class. There is at least one other passive strategy at the firm that is covered by a Morningstar analyst, so the People Pillar rating of the fund is inherited from the rating that the Morningstar analyst assigned to investment vehicles under the same brand name.

Above Average

People

Invesco succeeds in a number of areas but also has its share of subpar offerings, along with many others that land somewhere in the middle. A mid-2023 change of CEO, from longtime chief Marty Flanagan to veteran Invesco executive Andrew Schlossberg, is noteworthy, and several other executives retired or departed in 2023. Portfolio-manager shuffles aimed at bolstering poor performers, which began under Flanagan, have continued under Schlossberg, who told Morningstar his most important aim is bolstering “investment quality.” However, major changes of direction or approach are unlikely. The firm retains a Morningstar Parent rating of Average. 
Invesco’s international-equity teams in Texas and New York remain solid. However, the extensive U.S.-equity lineup needs improvement. Fixed-income offerings run the gamut: The multisector and short-term-bond areas are good, but corporate high-yield is less impressive. The firm’s exchange-traded fund lineup includes the popular Nasdaq-focused QQQ; passive strategies make up around 37% of Invesco’s assets under management. Invesco has not been averse to trying new types of strategies, and it was among the firms that immediately launched a spot bitcoin ETF after SEC approval in early 2024.
The picture outside the United States is mixed. Fund performance has been subpar in Asia, and while the picture has brightened in the United Kingdom and Europe, that region still can’t be considered a strength.

Parent

Invesco ESG S&P 500 R Equal Weight ETF

RSPE tracks an equal-weighted index of S&P 500 companies that exhibit environmental, social, and governance (ESG) characteristics.

Invesco S&P 500 Equal Weight ETF

Equal weight slightly outperformed the benchmark in July as market breadth remained stronger than in the first half. The market continued to climb in July as investors focused on second-quarter earnings reports, further propelled by better-than-expected macroeconomic updates.

Equal Weight RSP Slightly Outpaced Benchmark in July

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Bank of America recently raised its 2023 price target for the S&P 500 to 4,300 and to 4,600 in a bullish case scenario.

Is a Further 10% Rally in S&P 500 ETFs Possible?

In the current environment where cap-weighted indexes are dominated by just a few names, equal weighting can mitigate concentration risk. Advisors can use the Invesco S&P 500® Equal Weight ETF (RSP) as the core equity holding in client portfolios to remove size bias.

Equal Weighting Mitigates Concentration Risk

Recent polling data suggests that advisors prefer to maintain a diversified portfolio rather than utilize sector rotation strategies. Most advisors do not rotate between sectors that they believe will outperform the broader market.

How Equal Weighting at the Stock Level Impacts Sector Exposures

The S&P 500 Equal Weight Index lagged its cap-weighted parent S&P 500 in April, marking the third consecutive month of underperformance after a long period of outperformance. The market's recovery continued in April as investors focused on first-quarter earnings reports, further propelled by expectations of just one more interest rate hike from the Fed.

Equal Weight Lags Parent S&P 500 in April

Many advisors use the Invesco S&P 500® Equal Weight ETF (RSP) as the core equity holding in client portfolios as it removes size bias, effectively mitigating concentration risk. RSP is based on the S&P 500 Equal Weight Index, which is designed to be a size-neutral version of the S&P 500.

Overcome S&P 500 Concentration Risk with RSP

The S&P 500 Equal Weight Index lagged its cap-weighted parent S&P 500 in March for the second consecutive month but maintains its trailing 12-month lead. March was characterized by high volatility and concerns for the global economy.

Equal-Weight RSP Lags S&P 500 in March, Maintains TTM Lead

U.S. large-cap equal weight ETFs introduce sector tilts to a portfolio. The Invesco S&P 500 Equal Weight ETF (RSP) is the oldest single-factor ETF available to investors, accreting $32.6 billion in assets under management since its 2003 inception.

Equal Weight ETFs Introduce Sector Tilts

Investors may wonder about the overlap between two funds with the same methodology, where one of the funds incorporates ESG screening. As investors consider allocating to equal-weight strategies, the Invesco ESG S&P 500 Equal Weight ETF (RSPE) is a lesser-known relative of the Invesco S&P 500 Equal Weight ETF (RSP).

How Does RSPE Compare to RSP?

Invesco S&P 500 Equal Weight Financials ETF

Invesco S&P 500 Equal Weight Technology ETF

Following the close of U.S. markets Thursday, March 17, index giants S&P and MSCI commence the latest alterations to the global industry classification standard (GICS), meaning a slew of companies are moving from one sector to another and, in some cases, getting new industry classifications in the process.

GICS Changes Could Highlight Equal Weight Opportunity

Stocks fell sharply on Friday, closing out a tough week for markets. The S&P 500 shed nearly 5% this week while the Invesco S&P 500® Equal Weight ETF (RSP), which tracks the S&P 500 Equal Weight Index, dropped over 6% during the same period.

Now Is the Time to Add to Positions in RSP

Despite lagging its cap-weighted parent S&P 500 in February, equal weight's trailing 12-month relative outperformance is 5%. Both equal weight and the S&P 500 slipped in February, declining 3.3% and 2.4%, respectively, but equal weight maintains its lead over a one-year period, supported by strong 2022 and January performance.

Equal Weight's TTM Relative Outperformance to S&P 500 at 5%

Equal weight lagged its cap-weighted parent S&P 500 in February for the first time since September. Both the S&P 500 Equal Weight Index and the S&P 500 slipped in February, declining 3.3% and 2.4%, respectively, but equal weight maintains a modest lead year-to-date, buoyed by strong January performance.

Equal Weight Lagged S&P 500 in February, Maintains YTD Lead

The Invesco S&P 500® Equal Weight ETF (RSP) is maintaining its role as a favored core equity holding in 2022, hauling in nearing $2 billion in net flows year to date. RSP has seen $1.8 billion in net flows year to date and $571 million month to date as of January 21, according to ETF Database.

Equal Weight ETF RSP Approaches $2 Billion in Flows YTD

Invesco S&P 500 Equal Weight Materials ETF

The world of construction is experiencing its own renaissance of sorts — along with increased technology to make current operations more efficient, there's also an environmental, social, and governance (ESG) component added into the mix. This opens up opportunities for a pair of exchange traded funds (ETFs) to consider.

2 ETFs to Take Advantage of Sustainability Trends in Construction

Equal weight started the year on a high note, outperforming its cap-weight parent S&P 500 for another consecutive month. The S&P 500 Equal Weight Index gained 7.4% in January, outperforming the S&P 500, which gained 6.3% during the month.

Equal Weight Beats Parent S&P 500 in January

An easy forecast to make for 2023 and one that doesn't involve predicting market performance involves ongoing evolution for environmental, social, and governance (ESG) strategies.

Equal-Weight Could Be Ideal ESG Avenue

Equal weight outperformance has continued into the final week of January, as the index maintains its lead over the parent S&P 500 year to date.

Equal Weight Outperformance Continues into Final Week of January

After outperforming in 2022, equal weight is off to a strong start this year. The Invesco S&P 500 Equal Weight ETF (RSP) handily outperformed the S&P 500 last year, with that momentum continuing into the first weeks of 2023.

Equal Weight RSP Leads S&P 500 in First Weeks of 2023

As investors allocate to equal-weight strategies, the Invesco ESG S&P 500 Equal Weight ETF (RSPE) is lesser-known, has a compelling strategy, and incorporates ESG criteria. There are many reasons why investors favor equal weighting over market cap-weighted strategies, including enhanced diversification and historical outperformance.

How Does Equal Weight RSPE Stack Up to RSP?

The S&P 500 Equal Weight Index outperformed its cap-weighted parent in the last month of 2022. The S&P 500 EWI declined -4.7% in December, outperforming the S&P 500 on a relative basis, which declined -5.8% during the month.

Under the Hood of Equal Weight's December Outperformance

Equal weight outperformed the cap-weighted S&P 500 by 650 basis points in 2022. The Invesco S&P 500 Equal Weight ETF (RSP) tracks the S&P 500 Equal Weight Index, which includes all constituents in the S&P 500 but gives them equal weights at each quarterly rebalance.

Equal-Weight RSP Outperforms S&P 500 by 650 Basis Points in 2022

After equal weight's significant outperformance this year, many advisors are looking to the Invesco S&P 500 Equal Weight ETF (RSP) as the core equity holding in client portfolios.  RSP is a compelling offering for investors looking to enhance a portfolio's broad exposure to the U.S. market.

RSP's Use Case as a Core Equity Holding

The S&P 500 Equal Weight Index outperformed again in November, as the gap between equal weight and the S&P 500 last month was in the top quintile of historical experience, according to S&P Dow Jones Indices. The S&P 500 EWI increased 6.7% in November, outperforming the S&P 500, which gained 5.6% during the month.

Under the Hood of Equal Weight's Outperformance Last Month

The Invesco S&P 500® Equal Weight ETF (RSP) saw substantial November flows as investors look to capitalize on equal weight's significant outperformance over the S&P 500 this year. RSP's underlying index, the S&P 500 Equal Weight Index, gained 6.7% in November compared to the S&P 500's advance of 5.6%.

News for Invesco ESG S&P 500 R Equal Weight ETF ETF (RSPE)