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RYT Outperformance Against S&P 500 Tech Sector Expands

During a booming day for the broader market, the technology sector was the top performer, up more than 3% on Wednesday.

Investors looking to reallocate funds to the technology sector should: Invesco S&P 500 Equal Weight Technology ETF (RYT)The RYT is based on the S&P 500 Equal-Weighted Information Technology Index and has outperformed the market cap-weighted sector index for all periods over the past year.

RYTs differ from market cap-weighted ETFs that provide exposure to technology stocks. This is because the underlying index utilizes equal weighting. In other words, the component companies are evenly distributed at the quarterly rebalancing. This provides a much more balanced exposure than other options and a methodology that some investors believe will add value over the long term. An even distribution approach is particularly influential in the top-heavy tech sector, where only a handful of names dominate.

As of Nov. 29, the RYT increased 1.93% over the past month, while the S&P 500 Information Technology Index fell -0.42% over the same period, according to YCharts.

Over the three-month period, the RYT fell -2.16%, while the Cap Weighted Index fell -6.18%.

The RYT is still down -21.74% year-to-date and is now on track to raise interest rates by 50 basis points after Federal Reserve Chairman Jerome Powell suggested Wednesday that the central bank was on track to raise interest rates by 50 basis points. It’s the perfect time to distribute. Four 50 basis point rate hikes.

The S&P 500 Equal Weight Information Technology Index covers the Internet Appliances, Computers & Peripherals, Electronics, Office Electronics & Equipment, Semiconductor Equipment & Products, Diversified Telecommunications Services, and Wireless Telecommunications Services industries.

For more news, information and analysis, visit portfolio strategy channel.

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