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Is Invesco S&P 500 Equal Weight Consumer Discretionary ETF (RSPD) a Strong ETF Right Now?
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Designed to provide broad exposure to the Consumer Discretionary ETFs category of the market, the Invesco S&P 500 Equal Weight Consumer Discretionary ETF (RSPD - Free Report) 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.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
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.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.
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 sponsored by Invesco. It has amassed assets over $425.14 million, making it one of the larger ETFs in the Consumer Discretionary ETFs. RSPD seeks to match the performance of the S&P 500 EQL WEIGHT CONS DISCRETIONARY ID before fees and expenses.
The S&P 500 Equal Weight Consumer Discretionary Index equally weights stocks in the consumer discretionary 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 one of the cheaper products in the space.
The fund has a 12-month trailing dividend yield of 1.04%.
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.
Representing 100% of the portfolio, the fund has heaviest allocation to the Consumer Discretionary sector.
When you look at individual holdings, Carmax Inc (KMX - Free Report) accounts for about 2.02% of the fund's total assets, followed by Mohawk Industries Inc (MHK - Free Report) and Bath & Body Works Inc (BBWI - Free Report) .
RSPD's top 10 holdings account for about 19.77% of its total assets under management.
Performance and Risk
So far this year, RSPD return is roughly 4.21%, and it's up approximately 21.79% in the last one year (as of 03/12/2024). During this past 52-week period, the fund has traded between $38.50 and $49.59.
The fund has a beta of 1.39 and standard deviation of 23.22% for the trailing three-year period. With about 54 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco S&P 500 Equal Weight Consumer Discretionary ETF is a reasonable option for investors seeking to outperform the Consumer Discretionary ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
Vanguard Consumer Discretionary ETF (VCR - Free Report) tracks MSCI US Investable Market Consumer Discretionary 25/50 Index and the Consumer Discretionary Select Sector SPDR ETF (XLY - Free Report) tracks Consumer Discretionary Select Sector Index. Vanguard Consumer Discretionary ETF has $5.50 billion in assets, Consumer Discretionary Select Sector SPDR ETF has $20.09 billion. VCR has an expense ratio of 0.10% and XLY charges 0.09%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Consumer Discretionary 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 Discretionary ETF (RSPD) a Strong ETF Right Now?
Designed to provide broad exposure to the Consumer Discretionary ETFs category of the market, the Invesco S&P 500 Equal Weight Consumer Discretionary ETF (RSPD - Free Report) 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.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
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.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.
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 sponsored by Invesco. It has amassed assets over $425.14 million, making it one of the larger ETFs in the Consumer Discretionary ETFs. RSPD seeks to match the performance of the S&P 500 EQL WEIGHT CONS DISCRETIONARY ID before fees and expenses.
The S&P 500 Equal Weight Consumer Discretionary Index equally weights stocks in the consumer discretionary 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 one of the cheaper products in the space.
The fund has a 12-month trailing dividend yield of 1.04%.
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.
Representing 100% of the portfolio, the fund has heaviest allocation to the Consumer Discretionary sector.
When you look at individual holdings, Carmax Inc (KMX - Free Report) accounts for about 2.02% of the fund's total assets, followed by Mohawk Industries Inc (MHK - Free Report) and Bath & Body Works Inc (BBWI - Free Report) .
RSPD's top 10 holdings account for about 19.77% of its total assets under management.
Performance and Risk
So far this year, RSPD return is roughly 4.21%, and it's up approximately 21.79% in the last one year (as of 03/12/2024). During this past 52-week period, the fund has traded between $38.50 and $49.59.
The fund has a beta of 1.39 and standard deviation of 23.22% for the trailing three-year period. With about 54 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco S&P 500 Equal Weight Consumer Discretionary ETF is a reasonable option for investors seeking to outperform the Consumer Discretionary ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
Vanguard Consumer Discretionary ETF (VCR - Free Report) tracks MSCI US Investable Market Consumer Discretionary 25/50 Index and the Consumer Discretionary Select Sector SPDR ETF (XLY - Free Report) tracks Consumer Discretionary Select Sector Index. Vanguard Consumer Discretionary ETF has $5.50 billion in assets, Consumer Discretionary Select Sector SPDR ETF has $20.09 billion. VCR has an expense ratio of 0.10% and XLY charges 0.09%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Consumer Discretionary 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.