Making its debut on 11/01/2006, smart beta exchange traded fund Invesco S&P 500 Equal Weight Consumer Discretionary ETF (RSPD) provides investors broad exposure to the Consumer Discretionary ETFs category of the market.
What Are Smart Beta ETFs?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
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
RSPD is managed by Invesco, and this fund has amassed over $204.44 million, which makes it one of the average sized ETFs in the Consumer Discretionary ETFs. Before fees and expenses, RSPD seeks to match the performance of the S&P 500 EQL WEIGHT CONS DISCRETIONARY ID.
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
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.
Annual operating expenses for this ETF are 0.40%, making it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 0.71%.
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.
When you look at individual holdings, Carnival Corp (CCL) accounts for about 2.33% of the fund's total assets, followed by Royal Caribbean Cruises Ltd (RCL) and Nike Inc (NKE).
The top 10 holdings account for about 21.73% of total assets under management.
Performance and Risk
Year-to-date, the Invesco S&P 500 Equal Weight Consumer Discretionary ETF has added about 4.38% so far, and is up roughly 20.27% over the last 12 months (as of 08/05/2025). RSPD has traded between $44.09 and $56.67 in this past 52-week period.
The fund has a beta of 1.20 and standard deviation of 20.72% for the trailing three-year period. With about 52 holdings, it effectively diversifies company-specific risk .
Alternatives
Invesco S&P 500 Equal Weight Consumer Discretionary ETF is not a suitable option for investors seeking to outperform the Consumer Discretionary ETFs segment of the market. Instead, there are other ETFs in the space which investors should consider.
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 $6.07 billion in assets, Consumer Discretionary Select Sector SPDR ETF has $21.93 billion. VCR has an expense ratio of 0.09% and XLY changes 0.08%.
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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Invesco S&P 500 Equal Weight Consumer Discretionary ETF (RSPD): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).
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