U.S. Investing

Get in on the Booming Tech Industry with This Fund

Invesco S&P 500 Equal Weight Technology ETF (NYSEARCA:RYT) seeks to track the investment results, before fees and expenses, of the S&P 500 Equal Weight Information Technology Index.

RYT provides broad coverage of large technology companies, but its equal-weighting skews it away from having a market-like portfolio. A pure market-cap benchmark would invest heavily in its top securities, which are the mega-caps in the tech industry.

Instead, RYT allocates only a fraction of its overall assets to its top 10 holdings. This produces sector tilts such as an overweight to semiconductors and an underweight to software and information technology (IT) services. The index is rebalanced on a quarterly basis.

Source: Yahoo Finance

RYT tracks an equal-weighted index of S&P 500 technology companies. The fund generally will invest at least 90% of its total assets in the securities that comprise the underlying index. The underlying index is composed of all the components of the S&P 500 Information Technology Index, which contains the common stocks of all companies included in the S&P 500 Index that are classified as members of the information technology services sector, as defined by the Global Industry Classification Standard (GICS).

Source: StockCharts.com

The fund has amassed $2.8 billion in assets under management and an average spread of 0.6%. Its expense ratio sits at 0.40%, meaning it is relatively inexpensive to hold in relation to other exchange-traded funds. It has 74 holdings overall and a nice 0.84% distribution yield.

As with any opportunity, I urge all potential investors to exercise their own due diligence in deciding whether this fund fits their individual portfolio goals.

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.

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Jim Woods

Jim Woods is a 20-plus-year veteran of the markets with varied experience as a broker, hedge fund trader, financial writer, author and newsletter editor. Jim is the editor of Intelligence Report, Successful Investing, the Bullseye Stock Trader, and The Deep Woods (formerly the Weekly ETF Report). His books include co-authoring, “Billion Dollar Green: Profit from the Eco Revolution,” and “The Wealth Shield: How to Invest and Protect Your Money from Another Stock Market Crash, Financial Crisis or Global Economic Collapse.” He’s also ghostwritten many books and articles, as well as edited content for some of the investment industry’s biggest luminaries. His articles have appeared on many leading financial websites, including StockInvestor.com, InvestorPlace.com, Main Street Investor, MarketWatch, Street Authority, Human Events and many others. Jim formerly worked with Investor’s Business Daily founder William J. O’Neil, helping to author training courses in the CANSLIM stock-picking methodology. The independent firm TipRanks rates Jim the No. 3 financial blogger in the world (out of more than 6,000). TipRanks calculates that, since 2012, he's made 361 successful recommendations out of 499 total, earning a success rate of 72% and a +15.3% average return per recommendation. He is known in professional and personal circles as “The Renaissance Man,” because his expertise includes such varied fields as composing and performing music; Western horsemanship, combat marksmanship, martial arts, auto racing and bodybuilding. Jim holds a BA in philosophy from the University of California, Los Angeles, and is a former U.S. Army paratrooper. A self-described “radical for capitalism,” he celebrates the virtue of making money from his Southern California horse ranch.