ETFdb Logo
ETFdb Logo
  • ETF Database
  • Channels
    • Active ETF
    • Alternatives
    • Beyond Basic Beta
    • China Insights
    • Climate Insights
    • Commodities
    • Core Strategies
    • Crypto
    • Disruptive Technology
    • Dividend
    • Dual Impact
    • Emerging Markets
    • Energy Infrastructure
    • ESG
    • ETF Building Blocks
    • ETF Education
    • ETF Strategist
    • Fixed Income
    • Free Cash Flow
    • Future ETFs
    • Global Diversification
    • Gold/Silver/Critical Minerals
    • Innovative ETFs
    • Institutional Income Strategies
    • Leveraged & Inverse
    • Managed Futures
    • Market Insights
    • Megatrends
    • Modern Alpha
    • Multi-Asset
    • Night Effect
    • Portfolio Strategies
    • Retirement Income
    • Richard Bernstein Advisors
    • Tax Efficient Income
    • Thematic Investing
    • Volatility Resource
  • Tools
    • ETF Screener
    • ETF Country Exposure Tool
    • ETF Sector Tracker Tool
    • ETF Database Categories
    • Head-To-Head ETF Comparison Tool
    • ETF Stock Exposure Tool
    • ETF Issuer Fund Flows
    • Indexes
    • Mutual Fund To ETF Converter
    • ETF Data for Journalists
    • ETF Nerds
  • Research
    • First Bitcoin ETF
    • ETF Education
    • Equity Investing
    • Dividend ETFs
    • Leveraged ETFs
    • Inverse ETFs
    • Index Education
    • Index Insights
    • Top ETF Sectors
    • Top ETF Issuers
    • Top ETF Industries
  • Webcasts
  • Themes
    • AI ETFs
    • Blockchain ETFs
    • See all Thematic Investing ETF themes
    • ESG Investing
    • Marijuana ETFs
  • Multimedia
    • ETF 360 Video Series
    • ETF Trends on Videos
    • ETF Trends on Podcasts
    • ETF Prime Podcast
  • Company
    • About VettaFi
    • Get VettaFi’ed
  • PRO
    • Pro Content
    • Pro Tools
    • Advanced
    • FAQ
    • Pricing
    • Free Sign Up
    • Login
  1. Portfolio Strategies Channel
  2. Ease Your Mind Amid Tech Layoffs With RYT
Portfolio Strategies Channel
Share

Ease Your Mind Amid Tech Layoffs With RYT

Ben HernandezFeb 07, 2023
2023-02-07

While the expectation is that the tech sector will eventually rebound from a 2022 to forget, it can still be subject to heavy volatility as it implements cost-cutting via layoffs. That’s especially the case since big tech names occupy a sizeable portion of the S&P 500, which warrants an equal-weight strategy.

Layoffs can be especially disconcerting to investors because they could portend to forthcoming weakness in the sector. Many big tech names resorted to layoffs in 2022 as a cost-cutting measure with the expectation that corporate profits would suffer amid rising inflation.

A lot of the staff reduction comes after tech companies were the toast of the town during the early days of the pandemic. With social distancing measures in place, a heavier reliance on tech companies translated into increased hiring to fill this demand.

“In the past month alone, tech companies have cut nearly 60,000 jobs, reversing a hiring spree that surged during the pandemic as millions of Americans moved their lives online,” a CBS News report noted.

Now, the air is coming out of the proverbial tires with inflation expected to, as mentioned, put a dent into corporate profits. At some point, the tech industry will turn around, but investors bargain-hunting in the tech sector may want to approach with caution — an equal-weight strategy can help with that.

An Equal-Weight ETF for Big Tech

A convenience of using an equal-weight strategy is that it essentially incorporates a volatility management tool, and when you tie it into an exchange traded fund (ETF), it also offers convenient exposure. That’s all available in one ETF: the Invesco S&P 500 Equal Weight Technology ETF (RYT A-).

Per its fund description, RYT simply tracks the S&P 500 Equal Weight Information Technology Index. Component companies in the index are given equal allocations at each quarterly rebalance, disallowing overconcentration in a few stocks.

As a result of this strategy, exposure is more balanced, giving investors the opportunity to capture upside in tech names in the S&P 500 while also limiting the downside should volatility strike. This is especially helpful in the tech sector, which can experience heavy market fluctuations at times.

The S&P 500 Equal Weight Information Technology Index covers a large swathe of tech-related industries. These areas include the following: internet equipment, computers and peripherals, electronic equipment, office electronics and instruments, semiconductor equipment and products, diversified telecommunication services, and wireless telecommunication services.

For more news, information, and analysis, visit our Portfolio Strategies Channel.


Content continues below advertisement

Loading Articles...
Help & Info
  • Contact Us
Tools
  • ETF Screener
  • ETF Analyzer
  • Mutual Fund to ETF Converter
  • Head-To-Head ETF Comparison
  • ETF Country Exposure Tool
  • ETF Stock Exposure Tool
  • ETF Performance Visualizer
  • ETF Database Model Portfolios
  • ETF Database Realtime Ratings
  • ETF Database Pro
More Tools
  • ETF Launch Center
  • Financial Advisor & RIA Center
  • ETF Database RSS Feed
Explore ETFs
  • ETF News
  • ETF Picks of the Month
  • ETF Category Reports
  • Premium Articles
  • Alphabetical Listing of ETFs
  • Best ETFs
  • Browse ETFs by ETF Database Category
  • Browse ETFs by Index
  • Browse ETFs by Issuer
  • Compare ETFs
Legal
  • Terms of Use and Privacy Policy
  • © 2023 VettaFi LLC. All rights reserved.
Follow ETF Database
Follow ETF Database

Advertisement

Is Your Portfolio Positioned With Enough Global Exposure?

ETF Education Channel

How to Allocate Commodities in Portfolios

Tom LydonApr 26, 2022
2022-04-26

A long-running debate in asset allocation circles is how much of a portfolio an investor should...

Core Strategies Channel

Why ETFs Experience Limit Up/Down Protections

Karrie GordonMay 13, 2022
2022-05-13

In a digital age where information moves in milliseconds and millions of participants can transact...

}
X