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Is Invesco S&P 500 Equal Weight Consumer Staples ETF (RHS) a Strong ETF Right Now?
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Designed to provide broad exposure to the Consumer Staples ETFs category of the market, the Invesco S&P 500 Equal Weight Consumer Staples ETF is a smart beta exchange traded fund launched on 11/01/2006.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
RHS is managed by Invesco, and this fund has amassed over $462.84 million, which makes it one of the average sized ETFs in the Consumer Staples ETFs. This particular fund, before fees and expenses, seeks to match the performance of the S&P 500 Equal Weight Consumer Staples Index.
The S&P 500 Equal Weight Consumer Staples Index is an unmanaged equal weighted version of the S&P 500 Consumer Staples Index that consists of common stocks of companies that comprise the Consumer Staples Sector of the S&P 500 Index, including manufacturers and distributors of food, beverages and tobacco and producers of non-durable household goods and personal products.
Cost & Other Expenses
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
With on par with most peer products in the space, this ETF has annual operating expenses of 0.40%.
The fund has a 12-month trailing dividend yield of 2.13%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
Representing 100% of the portfolio, the fund has heaviest allocation to the Consumer Staples sector.
Looking at individual holdings, Estee Lauder Cos Inc/the (EL - Free Report) accounts for about 3.42% of total assets, followed by Costco Wholesale Corp (COST - Free Report) and Kimberly-Clark Corp (KMB - Free Report) .
Its top 10 holdings account for approximately 32.79% of RHS's total assets under management.
Performance and Risk
Year-to-date, the Invesco S&P 500 Equal Weight Consumer Staples ETF return is roughly 6.44% so far, and was up about 10.63% over the last 12 months (as of 10/25/2021). RHS has traded between $137.57 and $166.83 in this past 52-week period.
The fund has a beta of 0.69 and standard deviation of 18.50% for the trailing three-year period, which makes RHS a medium risk choice in this particular space. With about 33 holdings, it has more concentrated exposure than peers.
Alternatives
Invesco S&P 500 Equal Weight Consumer Staples ETF is a reasonable option for investors seeking to outperform the Consumer Staples ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
Vanguard Consumer Staples ETF (VDC - Free Report) tracks MSCI US Investable Market Consumer Staples 25/50 Index and the Consumer Staples Select Sector SPDR ETF (XLP - Free Report) tracks Consumer Staples Select Sector Index. Vanguard Consumer Staples ETF has $5.91 billion in assets, Consumer Staples Select Sector SPDR ETF has $11.69 billion. VDC has an expense ratio of 0.10% and XLP charges 0.12%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Consumer Staples ETFs.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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Is Invesco S&P 500 Equal Weight Consumer Staples ETF (RHS) a Strong ETF Right Now?
Designed to provide broad exposure to the Consumer Staples ETFs category of the market, the Invesco S&P 500 Equal Weight Consumer Staples ETF is a smart beta exchange traded fund launched on 11/01/2006.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
RHS is managed by Invesco, and this fund has amassed over $462.84 million, which makes it one of the average sized ETFs in the Consumer Staples ETFs. This particular fund, before fees and expenses, seeks to match the performance of the S&P 500 Equal Weight Consumer Staples Index.
The S&P 500 Equal Weight Consumer Staples Index is an unmanaged equal weighted version of the S&P 500 Consumer Staples Index that consists of common stocks of companies that comprise the Consumer Staples Sector of the S&P 500 Index, including manufacturers and distributors of food, beverages and tobacco and producers of non-durable household goods and personal products.
Cost & Other Expenses
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
With on par with most peer products in the space, this ETF has annual operating expenses of 0.40%.
The fund has a 12-month trailing dividend yield of 2.13%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
Representing 100% of the portfolio, the fund has heaviest allocation to the Consumer Staples sector.
Looking at individual holdings, Estee Lauder Cos Inc/the (EL - Free Report) accounts for about 3.42% of total assets, followed by Costco Wholesale Corp (COST - Free Report) and Kimberly-Clark Corp (KMB - Free Report) .
Its top 10 holdings account for approximately 32.79% of RHS's total assets under management.
Performance and Risk
Year-to-date, the Invesco S&P 500 Equal Weight Consumer Staples ETF return is roughly 6.44% so far, and was up about 10.63% over the last 12 months (as of 10/25/2021). RHS has traded between $137.57 and $166.83 in this past 52-week period.
The fund has a beta of 0.69 and standard deviation of 18.50% for the trailing three-year period, which makes RHS a medium risk choice in this particular space. With about 33 holdings, it has more concentrated exposure than peers.
Alternatives
Invesco S&P 500 Equal Weight Consumer Staples ETF is a reasonable option for investors seeking to outperform the Consumer Staples ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
Vanguard Consumer Staples ETF (VDC - Free Report) tracks MSCI US Investable Market Consumer Staples 25/50 Index and the Consumer Staples Select Sector SPDR ETF (XLP - Free Report) tracks Consumer Staples Select Sector Index. Vanguard Consumer Staples ETF has $5.91 billion in assets, Consumer Staples Select Sector SPDR ETF has $11.69 billion. VDC has an expense ratio of 0.10% and XLP charges 0.12%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Consumer Staples ETFs.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.