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Should You Invest in the Invesco S&P 500 Equal Weight Consumer Staples ETF (RHS)?

·4 min read

Looking for broad exposure to the Consumer Staples - Broad segment of the equity market? You should consider the Invesco S&P 500 Equal Weight Consumer Staples ETF (RHS), a passively managed exchange traded fund launched on 11/01/2006.

Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.

Additionally, sector ETFs offer convenient ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. Consumer Staples - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 13, placing it in bottom 19%.

Index Details

The fund is sponsored by Invesco. It has amassed assets over $580.69 million, making it one of the average sized ETFs attempting to match the performance of the Consumer Staples - Broad segment of the equity market. RHS 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.

Costs

When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.

Annual operating expenses for this ETF are 0.40%, making it on par with most peer products in the space.

It has a 12-month trailing dividend yield of 2.40%.

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.

This ETF has heaviest allocation in the Consumer Staples sector--about 100% of the portfolio.

Looking at individual holdings, Kroger Co/the (KR) accounts for about 3.94% of total assets, followed by Archer-Daniels-Midland Co (ADM) and Altria Group Inc (MO).

The top 10 holdings account for about 35.04% of total assets under management.

Performance and Risk

So far this year, RHS has lost about -0.13%, and it's up approximately 7.19% in the last one year (as of 07/04/2022). During this past 52-week period, the fund has traded between $153.68 and $180.71.

The ETF has a beta of 0.59 and standard deviation of 19.18% for the trailing three-year period, making it 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 sports a Zacks ETF Rank of 4 (Sell), which is based on expected asset class return, expense ratio, and momentum, among other factors. RHS, then, is not the best option for investors seeking exposure to the Consumer Staples ETFs segment of the market. Instead, there are better ETFs in the space to consider.

Vanguard Consumer Staples ETF (VDC) tracks MSCI US Investable Market Consumer Staples 25/50 Index and the Consumer Staples Select Sector SPDR ETF (XLP) tracks Consumer Staples Select Sector Index. Vanguard Consumer Staples ETF has $6.42 billion in assets, Consumer Staples Select Sector SPDR ETF has $15.56 billion. VDC has an expense ratio of 0.10% and XLP charges 0.10%.

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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Invesco S&P 500 Equal Weight Consumer Staples ETF (RHS): ETF Research Reports
 
Altria Group, Inc. (MO) : Free Stock Analysis Report
 
Archer Daniels Midland Company (ADM) : Free Stock Analysis Report
 
The Kroger Co. (KR) : Free Stock Analysis Report
 
Consumer Staples Select Sector SPDR ETF (XLP): ETF Research Reports
 
Vanguard Consumer Staples ETF (VDC): ETF Research Reports
 
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