A strong management team and sound investment process underpin Invesco S&P 500® Equal Weight Utilts ETF's Morningstar Medalist Rating of Gold. The portfolio maintains a sizable cost advantage over competitors, priced within the least expensive fee quintile among peers.  

 The strategy’s management team earns an Above Average People Pillar rating. The strategy's effective investment approach earns an Above 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 currently 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

NRG Energy

NextEra Energy

Constellation Energy Corp

Vistra Energy

Public Service Enterprise Group

Southern Company

American Water Works

Dominion Energy

Xcel Energy

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. Invesco S&P 500® Equal Weight Utilts ETF earns an Above Average Process Pillar rating. 

The predominant contributor to the rating is that this fund tracks 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. Excellent risk-adjusted performance also bolsters the rating. This can be seen in the fund's 10-year alpha calculated relative to the category average, which suggests that the managers have shown skill in their allocation of risk. 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.

 This strategy targets smaller plays than its peers’ average in the Utilities Morningstar Category. But in terms of style (value/growth) exposure, it does not have much of a bias and resembles the category's typical portfolio. Analyzing additional factors, this strategy has held more highly liquid stocks compared to Morningstar Category Peers in the past few years. This gives the managers more flexibility during bear markets to sell without adversely affecting prices. In recent months, the strategy was more exposed to the Liquidity factor compared with its Morningstar Category peers as well. This strategy has also exhibited a tilt toward high-volatility stocks over these years, meaning it has invested in companies that have a higher historical standard deviation of returns. This orientation tends to pay off most prominently when markets are hot. Compared with category peers, the strategy also had more exposure to the Volatility factor in the most recent month. Additionally, this strategy has demonstrated a preference for high-momentum stocks in these years. Momentum strategies wager that market outperformers will continue to outperform, and laggards will continue to lag. Higher exposure to the former could mean the managers are overweighting stocks on winning streaks. In this month, the strategy also had more exposure to the Momentum factor over its peers. More information on a fund and its respective category's factor exposure can be found in the Factor Profile module within the Portfolio section. 

 The portfolio is overweight in utilities by 13.5 percentage points in terms of assets compared with the category average, and its consumer defensive allocation is similar to the category. The sectors with low exposure compared to category peers are energy and communication services, underweight the average by 4.9 and 3.4 percentage points of assets, respectively. The portfolio is composed of 31 holdings and its assets are more dispersed than peers in the category. In particular, 34.5% of the fund’s assets are concentrated in the top 10 fund holdings, compared to the category’s 69.5% average. And in closing, in terms of portfolio turnover, on a year-over-year basis, 11% of the fund's holdings have turned over, whether through increasing, decreasing, or changing a position.

Above Average

Process

Invesco S&P 500® Equal Weight Utilts ETF benefits considerably from its equity team, earning it an Above Average People Pillar rating. There are four managers listed on the fund: Peter Hubbard, Tony Seisser, Michael Jeanette, Pratik Doshi. The team is well equipped, with an average of 12 years of portfolio management experience. Together, they manage a total of 145 strategies, with a Bronze asset-weighted average Morningstar Medalist Rating, indicating the potential to deliver positive alpha relative to the category median in aggregate. This group has successfully retained management talent, with no departures in the past five years. 

 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.

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.

Average

Parent

Invesco S&P 500 Equal Weight Utilities ETF

RSPU tracks an equal-weighted index of S&P 500 utilities companies.

Launched on 11/01/2006, the Invesco S&P 500 Equal Weight Utilities ETF (RSPU) is a passively managed exchange traded fund designed to provide a broad exposure to the Utilities - Broad segment of the equity market.

Should You Invest in the Invesco S&P 500 Equal Weight Utilities ETF (RSPU)?

The Invesco S&P 500 Equal Weight Utilities ETF (RSPU) made its debut on 11/01/2006, and is a smart beta exchange traded fund that provides broad exposure to the Utilities/Infrastructure ETFs category of the market.

Is Invesco S&P 500 Equal Weight Utilities ETF (RSPU) a Strong ETF Right Now?

The sector as a whole is close to its historical baseline in valuation and quality. Gas and water utilities are slightly undervalued, while electricity and multi-utilities have a better quality score. Fast facts on Invesco S&P 500® Equal Weight Utilities ETF, an equal-weight alternative to XLU.

RSPU: Utilities Sector Dashboard For March

It appears the perfect storm against utilities stocks and the related exchange traded funds remains in place. Interest rates are high.

This Defensive Sector Appears Undervalued

Experienced investors know that utilities is one of the sectors most inversely correlated to interest rates. That explains why the S&P 500 Utilities Index slipped 7.2% last year amid spikes by 10-year Treasury yields.

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If you're looking for ETFs to buy, an excellent place to start is the top sector ETFs.  In 2023, eight out of 11 S&P 500 sector returns for the year were positive, with only consumer staples (-2.3%), energy (-4.8%), and utilities (-10.4%).

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The utilities sector is close to 11-year averages regarding valuation and quality metrics. Water utilities are moderately overvalued. Fast facts on RSPU, an equal-weight alternative to XLU.

RSPU: Utilities Dashboard For December

Gas utilities are undervalued by about 10% relative to 11-year averages. Other subsectors are close to their baselines in valuation and quality. Fast facts on RSPU, an equal-weight alternative to XLU.

RSPU: Utilities Dashboard For October

Water utilities are moderately overvalued. Gas, electricity and multi-utilities are close to their historical baseline in valuation. Fast facts on Invesco S&P 500® Equal Weight Utilities ETF, an equal-weight alternative to XLU.

RSPU: Utilities Dashboard For August

It's one of the smallest sectors in the S&P 500, and it scuffled through the first seven months of 2023. Throw in the fact that seemingly every market participant is enamored by mega-cap growth stocks, and it's easy to see why utilities stocks are flying under the radar in 2023.

Turn the Lights on to the Utilities Sector

The utilities sector is one of the smallest groups in the S&P 5000 and it could easily be overshadowed at a time when mega-cap growth stocks are driving the market higher. Put simply, many investors view utilities as a group lacking panache.

News for Invesco S&P 500 Equal Weight Utilities ETF ETF (RSPU)