In a sign of just how apprehensive some investors currently are about taking risk at the sector level, consumer staples have consistently been dotting the list of exchange traded funds hitting all-time highs.
That was the case late last week and it was the case again Monday as four of the nine ETFs hitting new highs were consumer staples funds. That quartet included the Guggenheim S&P Equal Weight Consumer Staples ETF (NYSEArca: RHS), the equal-weight answer to the popular Consumer Staples Select Sector SPDR (NYSEArca: XLP).
RHS, which debuted in 2006 eschews single-stock and strong dollar risk with significantly reduced weights to household products dividend darlings like Procter & Gamble (NYSE: PG) and Kimberly-Clark (NYSE: KMB). RHS has some other advantages, too.
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]
The $301.5 million RHS has received some accolades over its lifetime, including a prestigious four-star rating from Morningstar. The fund was rated, based on its risk-adjusted returns, 5 stars for 3 years, 4 stars for 5 years, and 4 stars Overall out of 11, 10, and 11 Consumer Defensive funds, respectively, according to Guggenheim.
The standard deviation on RHS is 9.86% and the ETF’s beta is 0.98, 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 time could be right to consider RHS. As we noted Monday, XLP is usually the best of the nine sector SPDRs in August, but RHS has slightly outpaced its cap-weighted rival over the past month. Year-to-date, the gap is more glaring with RHS up 6.7% compared to a 4% gain for XLP.
Guggenheim S&P Equal Weight Consumer Staples ETF
