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

If you're interested in broad exposure to the Consumer Discretionary - Broad segment of the equity market, look no further than the Invesco S&P 500 Equal Weight Consumer Discretionary ETF (RSPD), a passively managed exchange traded fund launched on 11/01/2006.

An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also excellent vehicles for long term investors.

Sector ETFs also provide investors access to a broad group of companies in particular sectors that offer low risk and diversified exposure. Consumer Discretionary - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 12, placing it in bottom 25%.

Index Details

The fund is sponsored by Invesco. It has amassed assets over $423.44 million, making it one of the larger ETFs attempting to match the performance of the Consumer Discretionary - Broad segment of the equity market. 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.

Costs

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 counterparts, other things remaining the same.

Annual operating expenses for this ETF are 0.40%, making it one of the cheaper products in the space.

It has a 12-month trailing dividend yield of 1.05%.

Sector Exposure and Top Holdings

It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.

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

Looking at individual holdings, Carmax Inc (KMX) accounts for about 2.02% of total assets, followed by Mohawk Industries Inc (MHK) and Bath & Body Works Inc (BBWI).

The top 10 holdings account for about 19.77% of total assets under management.

Performance and Risk

So far this year, RSPD has gained about 3.43%, and is up about 13.64% in the last one year (as of 03/06/2024). During this past 52-week period, the fund has traded between $38.50 and $49.59.

The ETF has a beta of 1.39 and standard deviation of 23.25% 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 carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, RSPD is a reasonable option for those seeking exposure to the Consumer Discretionary ETFs area of the market. Investors might also want to consider some other ETF options in the space.

Vanguard Consumer Discretionary ETF (VCR) tracks MSCI US Investable Market Consumer Discretionary 25/50 Index and the Consumer Discretionary Select Sector SPDR ETF (XLY) tracks Consumer Discretionary Select Sector Index. Vanguard Consumer Discretionary ETF has $5.56 billion in assets, Consumer Discretionary Select Sector SPDR ETF has $20.48 billion. VCR has an expense ratio of 0.10% and XLY charges 0.09%.

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 Discretionary ETF (RSPD): ETF Research Reports

CarMax, Inc. (KMX) : Free Stock Analysis Report

Mohawk Industries, Inc. (MHK) : Free Stock Analysis Report

Consumer Discretionary Select Sector SPDR ETF (XLY): ETF Research Reports

Vanguard Consumer Discretionary ETF (VCR): ETF Research Reports

Bath & Body Works, Inc. (BBWI) : Free Stock Analysis Report

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Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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