Kraft Foods (NasdaqGS: KRFT), which is being acquired by H.J. Heinz to create the world’s fifth-largest food company, is RHS’ largest holding at a weight of 3.67%. The acquisition of Kraft, funded by Brazilian private equity firm 3G and Warren Buffett’s Berkshire Hathaway (NYSE: BRK-A), might temporarily put a lid on large-scale staples sector mergers and acquisition activity.
However, if that is not the case, RHS is an ETF to remember because it is home to several rumored takeover targets, including Monster Beverage (NasdaqGS: MNST) and Keurig Green Mountain (NasdaqGS: GMCR). To a lesser extent Mondelez (NasdaqGS: MDLZ) and Hershey (NYSE: HSY) also have takeover potential. [An ETF for Staples M&A]
Those four stocks combine for 10.1% of RHS’s weight. The standard deviation on RHS is 9.63% and the ETF’s beta is 0.97, indicating the fund is more volatile than traditional cap-weighted staples ETFs. However, over the past three years, RHS has been only slightly more volatile than its cap-weighted rivals while outperforming those funds by wide enough margins to render the modestly higher volatility a moot point. [Get Stuck on Staples With This ETF]
The $273.5 million RHS charges 0.4% per year.
Guggenheim S&P Equal Weight Consumer Staples ETF
