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An ETF for Investors Looking for S&P-Type Returns
If you’re looking for some safe returns in your portfolio, the Invesco S&P 500 Equal Weight Utilities ETF (NYSE Acra:RYU) could be a great option. Not only does it pay investors a dividend, but it also has done very well against the S&P 500.
In five years, the ETF has climbed nearly 40%. And while that’s shy of how well the S&P 500 has done – nearly 50% -- it’s generally followed a similar path. With a yield of 2.45%, the ETF gives investors a way to further pad those returns as well.
Averaging a very low beta value of 0.24, the ETF is also not very volatile as well. And given that it’s full of utility stocks, investors wouldn’t expect that to be the case anyway.
Half of the fund’s holdings come from large cap stocks, which is about the same percent of stocks that are electric utilities as well. Another 35% are multi-utility stocks.
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The fund may be a little on the expensive side with a price-to-earnings ratio of over 20, but, generally, there’s a lot of value here.
One of the main advantages for investors is that the fund is very balanced and as the name suggests – equal weighted as well. None of the fund’s holdings make up more than 3.8% of the total fund.
While investors won’t be able to benefit from a solid performance by one big stock, they also won’t be weighed down if one of them has a less-than-stellar quarter, either.
The ETF could be an ideal option for dividend investors that don’t want to give up a chance to benefit from capital appreciation as well.
