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Looking for broad exposure to the Large Cap Blend segment of the US equity market? You should consider the ALPS Equal Sector Weight ETF (EQL), a passively managed exchange traded fund launched on 07/07/2009.
The fund is sponsored by Alps. It has amassed assets over $400.80 million, making it one of the average sized ETFs attempting to match the Large Cap Blend segment of the US equity market.
Companies that fall in the large cap category tend to have a market capitalization above $10 billion. Overall, they are usually a stable option, with less risk and more sure-fire cash flows than mid and small cap companies.
Typically holding a combination of both growth and value stocks, blend ETFs also demonstrate qualities seen in value and growth investments.
Investors should also pay attention to an ETF’s expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Annual operating expenses for this ETF are 0.25%, putting it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.78%.
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund’s holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
Looking at individual holdings, Consumer Discretionary Select Sector Spdr Fund (XLY) accounts for about 9.91% of total assets, followed by Communication Services Select Sector Spdr Fund (XLC) and Financial Select Sector Spdr Fund (XLF).
The top 10 holdings account for about 91.79% of total assets under management.
EQL seeks to match the performance of the NYSE Select Sector Equal Weight Index before fees and expenses. The NYSE Equal Sector Weight Index comprises of all active Select Sector SPDR ETFs in an equal weighted portfolio. These sector includes Consumer Discretionary, Consumer Staples, Materials, Energy, Technology, Utilities, Financial, Industrial, Health Care & Real Estate.
The ETF return is roughly 0% so far this year and is up about 16.38% in the last one year (as of 01/01/2025). In the past 52-week period, it has traded between $107.45 and $133.20.
The ETF has a beta of 0.96 and standard deviation of 15.30% for the trailing three-year period, making it a medium risk choice in the space. With about 12 holdings, it has more concentrated exposure than peers.
ALPS Equal Sector Weight ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, EQL is a reasonable option for those seeking exposure to the Style Box – Large Cap Blend area of the market. Investors might also want to consider some other ETF options in the space.
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