RSPE Profile
The Invesco ESG S&P 500 Equal Weight ETF aims to provide investment returns that closely match the performance of its underlying index, focusing on environmental, social, and governance (ESG) criteria. Under normal market conditions, the fund invests at least 90% of its total assets in the securities that make up this index. The underlying index is a modified version of the S&P 500 Equal Weight Index, which is designed to represent an equal-weighted portfolio of S&P 500 Index components that meet specific ESG criteria set by the index provider.
The underlying index, which the fund tracks, is crafted to measure the performance of companies that not only belong to the S&P 500 Index but also adhere to the ESG standards established by the index provider. These criteria are designed to assess companies based on their sustainability practices, social impact, and governance structures. By applying these standards, the fund seeks to invest in companies that are committed to responsible business practices while maintaining similar industry weightings as the parent index.
The funds equal-weighting methodology ensures that each component stock contributes equally to the index's performance, regardless of its market capitalization. This approach contrasts with traditional market-capitalization-weighted indices, where larger companies have a more significant impact on the index's performance. The equal-weighted strategy aims to provide a more balanced exposure to the S&P 500 constituents and to potentially capture opportunities from mid-sized and smaller companies within the index that might be overlooked in a cap-weighted approach.
As a non-diversified fund, the Invesco ESG S&P 500 Equal Weight ETF is concentrated in the securities that meet the ESG criteria of the underlying index. This sector-specific focus can result in higher volatility and risk compared to more diversified funds. Investors should be aware that the funds performance is tied to the ESG performance of its constituent companies and the overall trends in the S&P 500 Index, which may affect returns based on shifts in market conditions and ESG evaluations.
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