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

The Invesco S&P 500 Equal Weight Utilities ETF (RSPU), a smart beta ETF with $452.33 million in assets, has returned approximately 8.69% year-to-date and 21.82% over the last 12 months as of June 9, 2025. With an expense ratio of 0.40% and a 2.41% trailing dividend yield, RSPU equally weights utilities stocks within the S&P 500, offering concentrated exposure with its top 10 holdings accounting for 34.58% of assets; however, the article suggests investors seeking superior performance in the utilities sector may want to consider market cap weighted ETFs like VPU and XLU, which offer lower expense ratios and broader diversification.

Analysis

The Invesco S&P 500 Equal Weight Utilities ETF (RSPU), a smart beta fund with $452.33 million in assets under management, offers exposure to the utilities sector by equally weighting constituents of the S&P 500 Utilities Index. As of June 9, 2025, RSPU has delivered a year-to-date return of approximately 8.69% and a 12-month return of 21.82%, with a trailing 12-month dividend yield of 2.41%. The fund's annual operating expense ratio stands at 0.40%. Its portfolio is entirely allocated to the utilities sector, with top holdings such as Nrg Energy Inc (3.89%), Constellation Energy Corp, and Vistra Corp contributing to a concentration where the top 10 holdings represent 34.58% of total assets. The ETF holds approximately 33 names, indicating a more concentrated exposure compared to some peers, and exhibits a beta of 0.58 and a three-year standard deviation of 18.17%. Despite its performance, the article suggests RSPU is not an optimal choice for investors aiming to outperform the broader Utilities/Infrastructure ETF segment. It highlights alternatives like the Vanguard Utilities ETF (VPU) and the Utilities Select Sector SPDR ETF (XLU), which are market cap-weighted, possess significantly larger AUM ($6.87 billion and $18.45 billion, respectively), and feature substantially lower expense ratios of 0.09% and 0.08%. This positioning, along with a negative sentiment score of -0.4 for RSPU versus positive scores of 0.5 for VPU and XLU, implies that while RSPU provides a specific equal-weight strategy, traditional market-cap weighted ETFs may offer more cost-effective and potentially lower-risk exposure to the utilities sector.

Key Decisions for Investors

• Investors seeking cost-effective and broadly diversified exposure to the utilities sector should evaluate market-cap weighted alternatives such as VPU and XLU, which offer significantly lower expense ratios and larger asset bases than RSPU.
• While RSPU has demonstrated positive recent performance, its higher expense ratio of 0.40% and more concentrated, equal-weighted approach may not be suitable for investors primarily focused on outperforming the utilities sector or minimizing costs.
• Given the article's assessment and the availability of lower-cost alternatives, investors currently holding RSPU should review their investment rationale, particularly if their objective is to match or exceed broad utilities market returns with minimal expense drag.