Invesco Equal-Weight Utilities ETF Outpaces Rivals

Invesco S&P 500 Equal-Weight Utilities ETF (RSPU) has outperformed larger cap-weighted utilities ETFs by roughly 700 basis points over the past three years. The fund manages about $534.1 million and will mark its 20th anniversary in November. RSPU applies an equal-weight approach across 32 stocks rather than weighting holdings by market capitalization.

The equal-weight methodology means each component holds a similar portfolio weight, which changes how individual stock moves affect overall returns compared with cap-weighted funds. The utilities sector has also been treated by some investors as a slow-moving bond proxy amid expectations of higher-for-longer interest rates. Ongoing discussion of consolidation in the sector and utilities’ links to data-center and artificial intelligence demand have been cited as factors supporting interest in the space.

RSPU’s holdings include regulated utilities such as Edison International, American Electric Power and FirstEnergy. Morningstar analyst Travis Miller noted regulators approved recovery and securitization of $3.6 billion tied to 2017-18 wildfire and mudslide costs for Edison International, which should improve cash flow in 2026. Miller also flagged that settlement costs related to the Eaton fire could be a near-term drag while California laws AB 1054 and SB 254 aim to limit long-term cash flow constraints.

Morningstar’s Andrew Bischoff highlighted American Electric Power’s exposure to data-center load, estimating system peak demand could rise by about 63 gigawatts by year-end 2030 and that data centers make up over 80% of that incremental load. Bischoff noted much of the new demand is backed by signed energy service agreements or letters of agreement. On FirstEnergy, Bischoff pointed to the company’s effort to strengthen its balance sheet and reach a funds-from-operations-to-debt target of 14%–15%.

Analysts note RSPU’s equal-weight construction can reduce concentration risk relative to cap-weighted utilities ETFs and allow smaller component names with positive fundamentals to contribute to returns. The fund provides a single-ticket option for investors seeking broad exposure to the utility sector and has delivered stronger three-year returns than larger cap-weighted peers.