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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?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
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.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
The fund is managed by Invesco, and has been able to amass over $468.32 million, which makes it one of the average sized ETFs in the Consumer Staples ETFs. This particular fund seeks to match the performance of the S&P 500 Equal Weight Consumer Staples Index before fees and expenses.
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
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
Annual operating expenses for RHS are 0.40%, 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
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
RHS's heaviest allocation is in the Consumer Staples sector, which is about 100% of the portfolio.
Taking into account individual holdings, Archer-Daniels-Midland Co (ADM - Free Report) accounts for about 3.41% of the fund's total assets, followed by Tyson Foods Inc (TSN - Free Report) and General Mills Inc (GIS - Free Report) .
Its top 10 holdings account for approximately 33.08% of RHS's total assets under management.
Performance and Risk
Year-to-date, the Invesco S&P 500 Equal Weight Consumer Staples ETF has gained about 14.58% so far, and was up about 14.46% over the last 12 months (as of 12/31/2021). RHS has traded between $147.02 and $168.69 in this past 52-week period.
RHS has a beta of 0.68 and standard deviation of 18.24% 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 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 $6.51 billion in assets, Consumer Staples Select Sector SPDR ETF has $13.31 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?
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?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
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.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
The fund is managed by Invesco, and has been able to amass over $468.32 million, which makes it one of the average sized ETFs in the Consumer Staples ETFs. This particular fund seeks to match the performance of the S&P 500 Equal Weight Consumer Staples Index before fees and expenses.
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
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
Annual operating expenses for RHS are 0.40%, 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
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
RHS's heaviest allocation is in the Consumer Staples sector, which is about 100% of the portfolio.
Taking into account individual holdings, Archer-Daniels-Midland Co (ADM - Free Report) accounts for about 3.41% of the fund's total assets, followed by Tyson Foods Inc (TSN - Free Report) and General Mills Inc (GIS - Free Report) .
Its top 10 holdings account for approximately 33.08% of RHS's total assets under management.
Performance and Risk
Year-to-date, the Invesco S&P 500 Equal Weight Consumer Staples ETF has gained about 14.58% so far, and was up about 14.46% over the last 12 months (as of 12/31/2021). RHS has traded between $147.02 and $168.69 in this past 52-week period.
RHS has a beta of 0.68 and standard deviation of 18.24% 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 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 $6.51 billion in assets, Consumer Staples Select Sector SPDR ETF has $13.31 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.