After a difficult September for equities, investors are taking advantage of the opportunity to buy more buoyant funds at a reduced price.
Investors looking to reallocate funds to the space should consider the Invesco S&P 500 Equal Weight Technology ETFs (RYT )which is based on the S&P 500 Equal Weight Information Technology Index.
RYT took in $20 million in admissions over one week and $23 million over four weeks to October 6. date, according to VettaFi.
The S&P 500 Equal Weight Information Technology Index covers the following sectors: Internet equipment, computers and peripherals, electronic equipment, office electronics and instruments, semiconductor equipment and products, diversified telecommunications services and wireless telecommunications services.
RYT is different from other ETFs offering technology exposure because its underlying index uses an equal weighting methodology, which means that its constituent companies receive equal allocations at each quarterly rebalancing. The result is considerably more balanced exposure than other alternatives and a methodology that some investors believe will add value over the long term.
Equal weighting can provide diversification benefits and reduce concentration risk. This has a particularly big impact in the technology sector, as a small number of mega-cap funds can have an outsized impact on a market-cap-weighted fund.
The fund comprises 77 stocks, of which 89.23% are large-cap companies and 10.73% mid-cap companies as of October 6.
RYT charges an expense ratio of 40 basis points and has $1.9 billion in assets under management.
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