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

The Invesco S&P 500 Equal Weight Consumer Staples ETF (RHS) was launched on 11/01/2006, and is a passively managed exchange traded fund designed to offer broad exposure to the Consumer Staples - Broad segment of the equity market.

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.

Sector ETFs are also funds of convenience, offering many 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 6, placing it in top 38%.

Index Details

The fund is sponsored by Invesco. It has amassed assets over $651.99 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

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.

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 2.42%.

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.

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

Looking at individual holdings, Lamb Weston Holdings Inc (LW) accounts for about 3.48% of total assets, followed by Costco Wholesale Corp (COST) and General Mills Inc (GIS).

The top 10 holdings account for about 32.28% of total assets under management.

Performance and Risk

The ETF has lost about -0.97% so far this year and was up about 5.95% in the last one year (as of 11/10/2022). In that past 52-week period, it has traded between $153.68 and $180.71.

The ETF has a beta of 0.61 and standard deviation of 19.58% for the trailing three-year period, making it a medium risk choice in the space. With about 34 holdings, it has more concentrated exposure than peers.

Alternatives

Invesco S&P 500 Equal Weight Consumer Staples 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, RHS is a good option for those seeking exposure to the Consumer Staples ETFs area of the market. Investors might also want to consider some other ETF options in the space.

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 $6.48 billion in assets, Consumer Staples Select Sector SPDR ETF has $16.06 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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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.