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Is Invesco S&P 500 Equal Weight Consumer Staples ETF (RHS) a Strong ETF Right Now?
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The Invesco S&P 500 Equal Weight Consumer Staples ETF was launched on 11/01/2006, and is a smart beta exchange traded fund designed to offer broad exposure to the Consumer Staples ETFs category of the market.
What Are Smart Beta ETFs?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.
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.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
The fund is managed by Invesco, and has been able to amass over $517.38 million, which makes it one of the average sized ETFs in the Consumer Staples ETFs. RHS, 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 equally weights stocks in the consumer staples sector of the S&P 500 Index.
Cost & Other Expenses
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Operating expenses on an annual basis are 0.40% for this ETF, which makes it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 2.09%.
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.
For RHS, it has heaviest allocation in the Consumer Staples sector --about 100% of the portfolio.
Looking at individual holdings, Archer-Daniels-Midland Co (ADM - Free Report) accounts for about 3.41% of total assets, followed by Tyson Foods Inc (TSN - Free Report) and General Mills Inc (GIS - Free Report) .
The top 10 holdings account for about 33.08% of total assets under management.
Performance and Risk
So far this year, RHS has lost about -1.13%, and it's up approximately 13.74% in the last one year (as of 03/08/2022). During this past 52-week period, the fund has traded between $151.45 and $173.78.
RHS has a beta of 0.68 and standard deviation of 18.36% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 33 holdings, it has more concentrated exposure than peers.
Alternatives
Invesco S&P 500 Equal Weight Consumer Staples ETF is not a suitable option for investors seeking to outperform the Consumer Staples ETFs segment of the market. Instead, there are other ETFs in the space which investors should 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 $6.61 billion in assets, Consumer Staples Select Sector SPDR ETF has $15.33 billion. VDC has an expense ratio of 0.10% and XLP charges 0.10%.
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?
The Invesco S&P 500 Equal Weight Consumer Staples ETF was launched on 11/01/2006, and is a smart beta exchange traded fund designed to offer broad exposure to the Consumer Staples ETFs category of the market.
What Are Smart Beta ETFs?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.
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.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
The fund is managed by Invesco, and has been able to amass over $517.38 million, which makes it one of the average sized ETFs in the Consumer Staples ETFs. RHS, 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 equally weights stocks in the consumer staples sector of the S&P 500 Index.
Cost & Other Expenses
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Operating expenses on an annual basis are 0.40% for this ETF, which makes it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 2.09%.
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.
For RHS, it has heaviest allocation in the Consumer Staples sector --about 100% of the portfolio.
Looking at individual holdings, Archer-Daniels-Midland Co (ADM - Free Report) accounts for about 3.41% of total assets, followed by Tyson Foods Inc (TSN - Free Report) and General Mills Inc (GIS - Free Report) .
The top 10 holdings account for about 33.08% of total assets under management.
Performance and Risk
So far this year, RHS has lost about -1.13%, and it's up approximately 13.74% in the last one year (as of 03/08/2022). During this past 52-week period, the fund has traded between $151.45 and $173.78.
RHS has a beta of 0.68 and standard deviation of 18.36% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 33 holdings, it has more concentrated exposure than peers.
Alternatives
Invesco S&P 500 Equal Weight Consumer Staples ETF is not a suitable option for investors seeking to outperform the Consumer Staples ETFs segment of the market. Instead, there are other ETFs in the space which investors should 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 $6.61 billion in assets, Consumer Staples Select Sector SPDR ETF has $15.33 billion. VDC has an expense ratio of 0.10% and XLP charges 0.10%.
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.