
ETF A case for crypto
Cryptocurrencies are regularly in the news, but many investors don’t own them. Here are some things to keep in mind when considering an allocation.
The top 10 names in the S&P 500 currently account for 38% of the index and their contribution to risk is 53%, near historical highs over the past 25 years.
Equal weighting can help reduce exposure to the largest names in the S&P 500 while tiling a portfolio toward companies with more attractive valuation metrics.
Utilize the Invesco S&P 500 Equal Weight ETF (RSP) as a turnkey solution to address concentration concerns. As of March 31, 2025, asset owners allocated over $3.1 billion to RSP.
Asset owners including pension plans, endowments, and foundations are concerned about a record level of concentration within the S&P 500 index. Equal weighting is a popular way to reduce market concentration, but these clients need a vehicle that has ample liquidity to accommodate large allocations. A range of institutional clients have allocated billions into the Invesco S&P 500 Equal Weight ETF (RSP), demonstrating the investment use case as well as the efficiency of ETFs in meeting their needs.
As shown in the chart below, the top 10 names in the S&P 500 currently account for 38% of the index and their contribution to risk (measured by standard deviation) is 53%. This means that over half of the risk of the index can be explained by only 2% of the companies within the index (10 / 500).
RSP may be appealing for asset owners looking to enhance diversification within their US equity portfolio and tilt towards companies with more attractive valuation metrics. The ETF and its underlying index equally weight all the constituents in the S&P 500 Index at each quarterly rebalance. Relative to the benchmark S&P 500, the S&P 500 Equal Weight Index tilts towards small size, value, and dividends.
High valuations in mega-cap technology names have pushed the S&P 500’s price-to-earnings (P/E) ratio to 26.9, a 29% premium over the S&P 500 Equal Weight Index. The divergence widened during COVID and accelerated further as AI spending benefited the largest tech companies. The premium remains near its high over the past 15 years while the average over this period is 2%.
As of March 31, 2025, institutional asset owners allocated over $3.1 billion to RSP. In February 2025, a public pension plan initiated a $794 million Volume Weighted Average Price (VWAP) block trade in RSP. They executed the trade at -0.24 basis points versus end of day Net Asset Value (NAV), illustrating the liquidity and efficient execution available to institutional investors.1
Contact our institutional ETF team to learn more about RSP and how it can support institutional investors’ portfolio needs.
Cryptocurrencies are regularly in the news, but many investors don’t own them. Here are some things to keep in mind when considering an allocation.
A government pension plan sought to establish a new private credit portfolio following a large cash distribution. After exploring public market proxies with a high correlation to private credit, they allocated to the Invesco Senior Loan ETF (BKLN).
Our Quality Value Momentum (QVM) Multi-factor Suite of multi-factor indices and ETFs improves the risk-adjusted returns of traditional US equity beta exposure.
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Important information
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Image: Alexander Spatari / Getty
There are risks involved with investing in ETFs, including possible loss of money. Shares are not actively managed and are subject to risks similar to those of stocks, including those regarding short selling and margin maintenance requirements. Ordinary brokerage commissions apply. The Fund’s return may not match the return of the Underlying Index. The Fund is subject to certain other risks. Please see the current prospectus for more information regarding the risk associated with an investment in the Fund.
Investments focused in a particular industry or sector, are subject to greater risk, and are more greatly impacted by market volatility, than more diversified investments.
Stocks of medium-sized companies tend to be more vulnerable to adverse developments, may be more volatile, and may be illiquid or restricted as to resale.
Diversification does not guarantee a profit or eliminate the risk of loss.
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