A smart beta exchange traded fund, the Invesco S&P 500 Equal Weight Health Care ETF (RSPH) debuted on 11/01/2006, and offers broad exposure to the Health Care ETFs category of the market.
What Are Smart Beta ETFs?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
The fund is sponsored by Invesco. It has amassed assets over $670.14 million, making it one of the average sized ETFs in the Health Care ETFs. RSPH, before fees and expenses, seeks to match the performance of the S&P 500 EQUAL WEIGHT HEALTH CARE INDEX .
The S&P 500 Equal Weight Health Care Index equally weights stocks in the health care sector of the S&P 500 Index.
Cost & Other Expenses
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.
Operating expenses on an annual basis are 0.40% for RSPH, making it on par with most peer products in the space.
RSPH's 12-month trailing dividend yield is 0.71%.
Sector Exposure and Top Holdings
Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.
Representing 100% of the portfolio, the fund has heaviest allocation to the Healthcare sector.
Looking at individual holdings, Humana Inc (HUM) accounts for about 1.99% of total assets, followed by West Pharmaceutical Services Inc (WST) and Elevance Health Inc (ELV).
Its top 10 holdings account for approximately 18.42% of RSPH's total assets under management.
Performance and Risk
So far this year, RSPH return is roughly 3.36%, and was up about 14.3% in the last one year (as of 06/26/2026). During this past 52-week period, the fund has traded between $27.63 and $33.26.
The fund has a beta of 0.80 and standard deviation of 14.97% for the trailing three-year period. With about 61 holdings, it effectively diversifies company-specific risk .
Alternatives
Invesco S&P 500 Equal Weight Health Care ETF is a reasonable option for investors seeking to outperform the Health Care ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
Vanguard Health Care Index Fund ETF Shares (VHT) tracks MSCI US Investable Market Health Care 25/50 Index and the State Street Health Care Select Sector SPDR ETF ETF (XLV) tracks Health Care Select Sector Index. Vanguard Health Care Index Fund ETF Shares has $17.37 billion in assets, State Street Health Care Select Sector SPDR ETF ETF has $39.14 billion. VHT has an expense ratio of 0.09% and XLV changes 0.08%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Health Care ETFs
Bottom Line
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Invesco S&P 500 Equal Weight Health Care ETF (RSPH): ETF Research Reports
This article originally published on Zacks Investment Research (zacks.com).