The top five holdings of this ETF are: Conagra Brands Inc (CAG, 3.25%); McCormick & Co Inc Non-Voting (MKC, 3.22%); Clorox Co (CLX, 3.20%); Church & Dwight Co Inc (CHD, 3.17%); and Campbell Soup Co (CPB, 3.16%). The fund has a current annual dividend yield of 2.3%, paid quarterly.
Invesco S&P 500 Equal Weight Consumer Staples ETF (RHS)
From Sound Advice
Invesco S&P 500 Equal Weight Consumer Staples ETF is a diversified way of investing in the consumer staples sector—those unexciting products we use every day without much thought, ranging from food, beverages (including alcohol), household goods (including cleaning supplies), hygiene products, and tobacco.
These are products that people are unable (or unwilling) to remove from their budgets regardless of their financial situation. The nature of these products makes this sector defensive and much less vulnerable to recessions and bear markets.
RHS tracks a collection of 33 consumer staple stocks within the S&P 500 index. This ETF is unique because it invests equal amounts in these 33 stocks and rebalances the investments at the beginning of each calendar quarter. This practice has given RHS a superior performance because it gives investors exposure to many consumer staple stocks that are under-weighted in most portfolios, making them targets for new investment capital.
Earnings of consumer staple stocks are expected to continue to grow or remain steady while earnings of most other stocks are crashing and expected to be even worse throughout 2020.
The current coronavirus outbreak has given us a lesson on why consumer staples stocks generally provide stable investments, and this pandemic is giving cleaning products a larger boost than a typical recession, a demand that will likely reflect a “new normal”.
Gray Cardiff, Sound Advice, soundadvice-newsletter.com, 800-825-7007, July 31, 2020