ETFdb Logo
ETFdb Logo
  • ETF Database
  • Channels
    • Active ETF
    • Beyond Basic Beta
    • China Insights
    • Climate Insights
    • Commodities
    • Core Strategies
    • Crypto
    • Direct Indexing
    • Disruptive Technology
    • Energy Infrastructure
    • ETF Building Blocks
    • ETF Education
    • ETF Strategist
    • Financial Literacy
    • Fixed Income
    • Gold/Silver/Critical Minerals
    • Innovative ETFs
    • Institutional Income Strategies
    • Leveraged & Inverse
    • Managed Futures
    • Market Insights
    • Modern Alpha
    • Multifactor
    • Night Effect
    • Portfolio Strategies
    • Responsible Investing
    • Retirement Income
    • Richard Bernstein Advisors
    • Tax Efficient Income
  • 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
  • Research
    • 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 of the Week Podcast
    • ETF Prime Podcast
    • Video
  • Company
    • About VettaFi
    • Get VettaFi’ed
  • PRO
    • Pro Content
    • Pro Tools
    • Advanced
    • FAQ
    • Pricing
    • Free Sign Up
    • Login
  1. Portfolio Strategies Channel
  2. RYF Decreases Concentration Risk in Financials Sector
Portfolio Strategies Channel
Share

RYF Decreases Concentration Risk in Financials Sector

Elle CarusoJan 17, 2023
2023-01-17

Financials sector stocks moved in different directions on Tuesday as investors reacted to fourth-quarter 2022 earnings from Morgan Stanley (MS) and Goldman Sachs (GS).

Shares of Morgan Stanley jumped 6% on Tuesday after the company reported fourth-quarter earnings that beat analysts’ expectations. Meanwhile, Goldman Sachs’ stock was down 7% after reporting its worst earnings in a decade.

Bank earnings kicked off last Friday, offering a preview of what this year will bring for markets. JPMorgan Chase (JPM) and Bank of America (BAC) were among the first to report earnings for the fourth quarter of 2022, both beating analysts’ expectations. Wells Fargo (WFM) beat estimates, and CitiGroup’s (C) earnings largely met analysts’ expectations.

According to FactSet, Profits among the six big banks are expected to fall by 15% year over year, while revenue should tick higher due to growing loan books, Barron’s reported.

The Invesco S&P 500 Equal Weight Financials ETF (RYF B+) is a strong offering to consider for investors looking to overweight the financials sector. RYF offers concentrated exposure to the sector while limiting concentration risk by utilizing an equal weight methodology.

RYF distinguishes itself from other broad-based financial ETFs by its equal weight approach. Unlike cap-weighted products, each component in RYF receives an equal allocation in the fund upon each quarterly rebalance. This institutes an anti-momentum effect by selling relative winners and buying relative losers at each rebalance.

As a result, RYF maintains considerably lower concentration than most financial ETFs, as exposure is spread around evenly as opposed to being concentrated among a handful of mega-cap stocks. This enhances the diversification in a portfolio’s financials exposure and limits concentration risk.

RYF holds 68 securities as of January 12, according to ETF Database. The fund has returned 14.8% over three months and 4.2% over one month. The fund is down -11.1% over one year.

RYF charges 40 basis points.

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

Loading Articles...
Our Sites
  • VettaFi
  • Advisor Perspectives
  • ETF Trends
Tools
  • ETF Screener
  • Mutual Fund to ETF Converter
  • Head-To-Head ETF Comparison
  • ETF Country Exposure Tool
  • ETF Stock Exposure Tool
  • ETF Database Pro
More Tools
  • Financial Advisor & RIA Center
Explore ETFs
  • ETF News
  • ETF Category Reports
  • Premium Articles
  • Alphabetical Listing of ETFs
  • Browse ETFs by ETF Database Category
  • Browse ETFs by Index
  • Browse ETFs by Issuer
  • Compare ETFs
Information
  • Contact Us
  • Terms of Use and Privacy Policy
  • © 2023 VettaFi LLC. All rights reserved.

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