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Is Invesco S&P 500 Equal Weight Consumer Staples ETF (RHS) a Strong ETF Right Now?
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A smart beta exchange traded fund, the Invesco S&P 500 Equal Weight Consumer Staples ETF debuted on 11/01/2006, and offers 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.
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.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
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.
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
Managed by Invesco, RHS has amassed assets over $1.15 billion, making 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 equally weights stocks in the consumer staples sector of the S&P 500 Index.
Cost & Other Expenses
For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.
With on par with most peer products in the space, this ETF has annual operating expenses of 0.40%.
It's 12-month trailing dividend yield comes in at 2.44%.
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.
Taking into account individual holdings, Mccormick & Co Inc/md (MKC - Free Report) accounts for about 3.04% of the fund's total assets, followed by Kimberly-Clark Corp (KMB - Free Report) and General Mills Inc (GIS - Free Report) .
Its top 10 holdings account for approximately 28.01% of RHS's total assets under management.
Performance and Risk
So far this year, RHS has gained about 1.67%, and is up about 9.20% in the last one year (as of 05/22/2023). During this past 52-week period, the fund has traded between $153.79 and $177.20.
RHS has a beta of 0.59 and standard deviation of 14.53% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 38 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 $6.92 billion in assets, Consumer Staples Select Sector SPDR ETF has $18.75 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?
A smart beta exchange traded fund, the Invesco S&P 500 Equal Weight Consumer Staples ETF debuted on 11/01/2006, and offers 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.
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.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
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.
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
Managed by Invesco, RHS has amassed assets over $1.15 billion, making 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 equally weights stocks in the consumer staples sector of the S&P 500 Index.
Cost & Other Expenses
For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.
With on par with most peer products in the space, this ETF has annual operating expenses of 0.40%.
It's 12-month trailing dividend yield comes in at 2.44%.
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.
Taking into account individual holdings, Mccormick & Co Inc/md (MKC - Free Report) accounts for about 3.04% of the fund's total assets, followed by Kimberly-Clark Corp (KMB - Free Report) and General Mills Inc (GIS - Free Report) .
Its top 10 holdings account for approximately 28.01% of RHS's total assets under management.
Performance and Risk
So far this year, RHS has gained about 1.67%, and is up about 9.20% in the last one year (as of 05/22/2023). During this past 52-week period, the fund has traded between $153.79 and $177.20.
RHS has a beta of 0.59 and standard deviation of 14.53% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 38 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 $6.92 billion in assets, Consumer Staples Select Sector SPDR ETF has $18.75 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.