Ought to Invesco S&P 500 Prime 50 ETF (XLG) Be on Your Investing Radar?

Designed to offer broad publicity to the Giant Cap Mix section of the US fairness market, the Invesco S&P 500 Prime 50 ETF (XLG) is a passively managed change traded fund launched on 05/04/2005.

The fund is sponsored by Invesco. It has amassed property over $6.99 billion, making it one of many largest ETFs making an attempt to match the Giant Cap Mix section of the US fairness market.

Why Giant Cap Mix

Corporations that fall within the giant cap class are likely to have a market capitalization above $10 billion. Thought of a extra steady possibility, giant cap firms boast extra predictable money flows and are much less risky than their mid and small cap counterparts.

Mix ETFs normally maintain a mixture of progress and worth shares in addition to shares that exhibit each worth and progress traits.

Prices

Traders also needs to take note of an ETF’s expense ratio. Decrease value merchandise will produce higher outcomes than these with a better value, assuming all different metrics stay the identical.

Annual working bills for this ETF are 0.20%, placing it on par with most peer merchandise within the house.

It has a 12-month trailing dividend yield of 0.75%.

Sector Publicity and Prime Holdings

ETFs provide a diversified publicity and thus reduce single inventory danger however it’s nonetheless necessary to delve right into a fund’s holdings earlier than investing. Most ETFs are very clear merchandise and lots of disclose their holdings every day.

This ETF has heaviest allocation to the Info Know-how sector–about 43.70% of the portfolio. Telecom and Shopper Discretionary spherical out the highest three.

Taking a look at particular person holdings, Apple Inc (AAPL) accounts for about 12.02% of complete property, adopted by Microsoft Corp (MSFT) and Nvidia Corp (NVDA).

The highest 10 holdings account for about 58.63% of complete property underneath administration.

Efficiency and Danger

XLG seeks to match the efficiency of the S&P 500 Prime 50 ETF Index earlier than charges and bills. The S&P 500 Prime 50 Index consists of fifty of the most important firms within the S&P 500 Index.

The ETF return is roughly 26.70% to date this yr and is up about 40.86% within the final one yr (as of 11/04/2024). Previously 52-week interval, it has traded between $35.03 and $48.64.

The ETF has a beta of 1.01 and normal deviation of 19.29% for the trailing three-year interval, making it a medium danger selection within the house. With about 53 holdings, it successfully diversifies company-specific danger.

Alternate options

Invesco S&P 500 Prime 50 ETF holds a Zacks ETF Rank of two (Purchase), which relies on anticipated asset class return, expense ratio, and momentum, amongst different elements. Due to this, XLG is a good possibility for traders in search of publicity to the Fashion Field – Giant Cap Mix section of the market. There are different extra ETFs within the house that traders might contemplate as nicely.

The iShares Core S&P 500 ETF (IVV) and the SPDR S&P 500 ETF (SPY) observe the same index. Whereas iShares Core S&P 500 ETF has $540.81 billion in property, SPDR S&P 500 ETF has $588.15 billion. IVV has an expense ratio of 0.03% and SPY fees 0.09%.

Backside-Line

Passively managed ETFs have gotten more and more widespread with institutional in addition to retail traders as a result of their low value, transparency, flexibility and tax effectivity. They’re glorious automobiles for long run traders.

To study extra about this product and different ETFs, display for merchandise that match your funding aims and skim articles on newest developments within the ETF investing universe, please go to Zacks ETF Center.