ETF Education Report: RSPC

What this ETF is trying to do

The INVESCO S&P 500 (R) EQUAL WEIGHT COMMUNICATION SERVICES ETF (ticker: RSPC) focuses on companies in the communication services sector. Instead of giving more weight to the biggest companies, this ETF uses an "equal weight" approach for its holdings. This means it tries to give different companies in this group a more similar level of importance within the fund.

What the numbers show

When looking at how this ETF has performed, it is important to look at two different types of returns: price return (the change in the share price) and total return (which includes both price changes and distributions).

• Year-to-Date (YTD): The YTD price return is approximately -8.43%. The YTD total return is approximately -7.73%.

• One Year: The one-year price return is approximately -10.83%. The one-year total return is approximately -9.09%.

• Three Year: The three-year price return is approximately 35.49%. The three-year total return is approximately 40.86%.

To visualize the price change, the estimated price from roughly one year ago was $40.91. The current price is $36.47.

Income and distribution explanation

This ETF pays out cash to investors, known as distributions. The distribution yield is approximately 2.06%. Over the last 12 months, there were 5 payouts. These distributions usually happen on a quarterly basis. It is important to remember that a distribution yield tells you how much cash was paid out relative to the price, but it is not the same thing as your total return.

NAV erosion explanation

"NAV erosion" refers to a decline in the Net Asset Value (the actual value of the assets held by the fund). While a falling share price can sometimes be related to this, they are not the same thing. For RSPC, the erosion-risk score is 75, which is labeled as "Mild price erosion." This is a measurement of risk, not a confirmed fact that the fund's value has collapsed. There is no severe erosion-risk flag for this ETF.

Pros

• The fund has shown a strong three-year total return of approximately 40.86%.

• It provides regular cash distributions to investors.

Cons

• The fund has experienced a share-price decline over the last year.

• The YTD and one-year total returns are currently negative.

Top Holdings

The following is a partial list of the top holdings in this ETF. Please note that holdings can change over time:

• ROKU INC CLASS A (5.99%)

• OMNICOM GROUP INC (5.28%)

• AT&T INC (4.98%)

• COMCAST CORP CLASS A (4.96%)

• CHARTER COMMUNICATIONS INC CLASS A (4.94%)

• THE WALT DISNEY CO (4.87%)

• WARNER BROS. DISCOVERY INC (4.85%)

• LIVE NATION ENTERTAINMENT INC (4.79%)

• VERIZON COMMUNICATIONS INC (4.75%)

• PARAMOUNT SKYDANCE CORP (4.72%)

Beginner takeaway

When looking at an ETF like RSPC, always distinguish between the share price and the total return. While the share price has dropped recently, the total return includes the cash distributions paid to you. Also, remember that a distribution yield is a measurement of cash flow, not a guarantee of overall profit.