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Is Invesco S&P 500 Equal Weight Consumer Staples ETF (RSPS) a Strong ETF Right Now?
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The Invesco S&P 500 Equal Weight Consumer Staples ETF (RSPS - Free Report) was launched on 11/01/2006, and is a smart beta exchange traded fund designed to offer broad exposure to the Consumer Staples ETFs category of the market.
What Are Smart Beta ETFs?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
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.
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. RSPS has been able to amass assets over $479.91 million, making it one of the average sized ETFs in the Consumer Staples ETFs. RSPS seeks to match the performance of the S&P 500 EQL WEIGHT CONSUMER STAPLES INDX 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.
Cost & Other Expenses
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
Annual operating expenses for RSPS are 0.40%, which makes it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 2.75%.
Sector Exposure and Top Holdings
ETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
RSPS's heaviest allocation is in the Consumer Staples sector, which is about 100% of the portfolio.
When you look at individual holdings, Walgreens Boots Alliance Inc (WBA - Free Report) accounts for about 2.87% of the fund's total assets, followed by Estee Lauder Cos Inc/the (EL - Free Report) and Costco Wholesale Corp (COST - Free Report) .
RSPS's top 10 holdings account for about 27.25% of its total assets under management.
Performance and Risk
So far this year, RSPS return is roughly 1.09%, and is down about -2.55% in the last one year (as of 03/06/2024). During this past 52-week period, the fund has traded between $28.40 and $35.34.
RSPS has a beta of 0.60 and standard deviation of 13.51% for the trailing three-year period. With about 40 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 $6.76 billion in assets, Consumer Staples Select Sector SPDR ETF has $15.07 billion. VDC has an expense ratio of 0.10% and XLP 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 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 (RSPS) a Strong ETF Right Now?
The Invesco S&P 500 Equal Weight Consumer Staples ETF (RSPS - Free Report) was launched on 11/01/2006, and is a smart beta exchange traded fund designed to offer broad exposure to the Consumer Staples ETFs category of the market.
What Are Smart Beta ETFs?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
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.
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. RSPS has been able to amass assets over $479.91 million, making it one of the average sized ETFs in the Consumer Staples ETFs. RSPS seeks to match the performance of the S&P 500 EQL WEIGHT CONSUMER STAPLES INDX 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.
Cost & Other Expenses
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
Annual operating expenses for RSPS are 0.40%, which makes it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 2.75%.
Sector Exposure and Top Holdings
ETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
RSPS's heaviest allocation is in the Consumer Staples sector, which is about 100% of the portfolio.
When you look at individual holdings, Walgreens Boots Alliance Inc (WBA - Free Report) accounts for about 2.87% of the fund's total assets, followed by Estee Lauder Cos Inc/the (EL - Free Report) and Costco Wholesale Corp (COST - Free Report) .
RSPS's top 10 holdings account for about 27.25% of its total assets under management.
Performance and Risk
So far this year, RSPS return is roughly 1.09%, and is down about -2.55% in the last one year (as of 03/06/2024). During this past 52-week period, the fund has traded between $28.40 and $35.34.
RSPS has a beta of 0.60 and standard deviation of 13.51% for the trailing three-year period. With about 40 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 $6.76 billion in assets, Consumer Staples Select Sector SPDR ETF has $15.07 billion. VDC has an expense ratio of 0.10% and XLP 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 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.