We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating indiv idual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Is Invesco S&P 500 Equal Weight Consumer Staples ETF (RHS) a Strong ETF Right Now?
Read MoreHide Full Article
The Invesco S&P 500 Equal Weight Consumer Staples ETF (RHS - Free Report) made its debut on 11/01/2006, and is a smart beta exchange traded fund that provides 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.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
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.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
The fund is managed by Invesco. RHS has been able to amass assets over $683.18 million, making it one of the average sized ETFs in the Consumer Staples ETFs. Before fees and expenses, this particular fund 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.
Annual operating expenses for RHS are 0.40%, which makes it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 2.54%.
Sector Exposure and Top Holdings
Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.
For RHS, it has heaviest allocation in the Consumer Staples sector --about 100% of the portfolio.
When you look at individual holdings, Campbell Soup Co (CPB - Free Report) accounts for about 3.14% of the fund's total assets, followed by Lamb Weston Holdings Inc (LW - Free Report) and General Mills Inc (GIS - Free Report) .
RHS's top 10 holdings account for about 30.95% of its total assets under management.
Performance and Risk
So far this year, RHS has lost about -2.43%, and was up about 3.72% in the last one year (as of 03/22/2023). During this past 52-week period, the fund has traded between $153.79 and $180.71.
The fund has a beta of 0.59 and standard deviation of 16.22% for the trailing three-year period, which makes RHS a medium risk choice in this particular space. With about 34 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 $6.61 billion in assets, Consumer Staples Select Sector SPDR ETF has $16.52 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.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
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 (RHS - Free Report) made its debut on 11/01/2006, and is a smart beta exchange traded fund that provides 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.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
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.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
The fund is managed by Invesco. RHS has been able to amass assets over $683.18 million, making it one of the average sized ETFs in the Consumer Staples ETFs. Before fees and expenses, this particular fund 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.
Annual operating expenses for RHS are 0.40%, which makes it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 2.54%.
Sector Exposure and Top Holdings
Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.
For RHS, it has heaviest allocation in the Consumer Staples sector --about 100% of the portfolio.
When you look at individual holdings, Campbell Soup Co (CPB - Free Report) accounts for about 3.14% of the fund's total assets, followed by Lamb Weston Holdings Inc (LW - Free Report) and General Mills Inc (GIS - Free Report) .
RHS's top 10 holdings account for about 30.95% of its total assets under management.
Performance and Risk
So far this year, RHS has lost about -2.43%, and was up about 3.72% in the last one year (as of 03/22/2023). During this past 52-week period, the fund has traded between $153.79 and $180.71.
The fund has a beta of 0.59 and standard deviation of 16.22% for the trailing three-year period, which makes RHS a medium risk choice in this particular space. With about 34 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 $6.61 billion in assets, Consumer Staples Select Sector SPDR ETF has $16.52 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.