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Is Invesco S&P 500 Equal Weight Consumer Discretionary ETF (RSPD) a Strong ETF Right Now?
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Making its debut on 11/01/2006, smart beta exchange traded fund Invesco S&P 500 Equal Weight Consumer Discretionary ETF (RSPD - Free Report) provides investors broad exposure to the Consumer Discretionary ETFs category of the market.
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.
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.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking 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.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
The fund is managed by Invesco. RSPD has been able to amass assets over $378.18 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
Expense ratios are an important factor in the return of an ETF and in the long-term, cheaper funds can significantly outperform their more expensive cousins, other things remaining the same.
Annual operating expenses for this ETF are 0.40%, making it one of the least expensive products in the space.
It's 12-month trailing dividend yield comes in at 1.25%.
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.
RSPD's heaviest allocation is in the Consumer Discretionary sector, which is about 100% of the portfolio.
Looking at individual holdings, Tesla Inc (TSLA - Free Report) accounts for about 2.15% of total assets, followed by Garmin Ltd (GRMN - Free Report) and Norwegian Cruise Line Holdings Ltd (NCLH - Free Report) .
RSPD's top 10 holdings account for about 20.68% of its total assets under management.
Performance and Risk
The ETF has added roughly 4.16% so far this year and it's up approximately 9.36% in the last one year (as of 11/10/2023). In the past 52-week period, it has traded between $38.47 and $47.50.
RSPD has a beta of 1.37 and standard deviation of 23.51% for the trailing three-year period. With about 53 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 $4.43 billion in assets, Consumer Discretionary Select Sector SPDR ETF has $16.17 billion. VCR has an expense ratio of 0.10% and XLY 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 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?
Making its debut on 11/01/2006, smart beta exchange traded fund Invesco S&P 500 Equal Weight Consumer Discretionary ETF (RSPD - Free Report) provides investors broad exposure to the Consumer Discretionary ETFs category of the market.
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.
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.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking 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.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
The fund is managed by Invesco. RSPD has been able to amass assets over $378.18 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
Expense ratios are an important factor in the return of an ETF and in the long-term, cheaper funds can significantly outperform their more expensive cousins, other things remaining the same.
Annual operating expenses for this ETF are 0.40%, making it one of the least expensive products in the space.
It's 12-month trailing dividend yield comes in at 1.25%.
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.
RSPD's heaviest allocation is in the Consumer Discretionary sector, which is about 100% of the portfolio.
Looking at individual holdings, Tesla Inc (TSLA - Free Report) accounts for about 2.15% of total assets, followed by Garmin Ltd (GRMN - Free Report) and Norwegian Cruise Line Holdings Ltd (NCLH - Free Report) .
RSPD's top 10 holdings account for about 20.68% of its total assets under management.
Performance and Risk
The ETF has added roughly 4.16% so far this year and it's up approximately 9.36% in the last one year (as of 11/10/2023). In the past 52-week period, it has traded between $38.47 and $47.50.
RSPD has a beta of 1.37 and standard deviation of 23.51% for the trailing three-year period. With about 53 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 $4.43 billion in assets, Consumer Discretionary Select Sector SPDR ETF has $16.17 billion. VCR has an expense ratio of 0.10% and XLY 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 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.