Is Invesco S&P 500 Equal Weight Consumer Discretionary ETF (RSPD) a Strong ETF Right Now?

The Invesco S&P 500 Equal Weight Consumer Discretionary ETF (RSPD), a smart beta ETF with $210.97 million in assets, has returned 9.75% over the past year but is down -1.85% YTD as of June 5, 2025. With an expense ratio of 0.40% and top holdings in Ulta Beauty, Booking Holdings, and Tesla, the fund equally weights consumer discretionary stocks within the S&P 500; however, the article suggests investors seeking superior performance in this sector should consider alternatives like VCR or XLY, which offer lower expense ratios and potentially lower risk through market-cap weighting.

Analysis

The Invesco S&P 500 Equal Weight Consumer Discretionary ETF (RSPD) is a smart beta fund with $210.97 million in assets under management, employing an equal-weighting strategy for its 53 holdings within the S&P 500's consumer discretionary sector. It carries an annual operating expense ratio of 0.40% and has a 12-month trailing dividend yield of 0.95%. The fund's portfolio is almost entirely allocated to the consumer discretionary sector (99.90%), with top individual holdings such as Ulta Beauty Inc. (2.36%), Booking Holdings Inc., and Tesla Inc., where the top 10 holdings account for approximately 22.03% of total assets. Performance data as of June 5, 2025, indicates a year-to-date loss of -1.85% and a gain of 9.75% over the past year. RSPD has a beta of 1.21 and a three-year trailing standard deviation of 21.74%. Critically, the analysis suggests RSPD is not a suitable option for investors seeking to outperform the Consumer Discretionary ETFs segment. In contrast, market-cap weighted alternatives like the Vanguard Consumer Discretionary ETF (VCR), with $5.84 billion in AUM and a 0.09% expense ratio, and the Consumer Discretionary Select Sector SPDR ETF (XLY), holding $21.60 billion in AUM with a 0.08% expense ratio, are highlighted as potentially more appropriate choices due to their significantly lower costs and different indexing methodologies.

Key Decisions for Investors

• Investors seeking to outperform within the consumer discretionary sector should note that RSPD is explicitly not recommended for this objective based on the provided analysis.
• Consider evaluating alternative ETFs such as Vanguard Consumer Discretionary ETF (VCR) or Consumer Discretionary Select Sector SPDR ETF (XLY), which offer substantially lower expense ratios (0.09% and 0.08% respectively) and market-capitalization weighting strategies, presented as potentially more favorable options.
• Current holders of RSPD, or those contemplating an investment, should carefully weigh its 0.40% expense ratio and the article's performance assessment against these larger, lower-cost, market-cap weighted alternatives within the same sector.