By late morning Tuesday, consumer staples are trading up 1%, with Walmart (WMT) in the lead after announcing results for the fiscal second quarter of 2023.
On Tuesday, Walmart said sales grew more than 8%, but profits tightened in the fiscal second quarter, as consumers turned to the discounter for groceries and essentials, CNBC reported. The company’s shares rose more than 5% in morning trading.
Walmart reported earnings that surpassed analysts’ expectations. However, it reiterated its profit warning last month, when the company said inflation-pinched shoppers were buying less high-margin discretionary merchandise like apparel as they spent more on necessities.
Investors can gain exposure to Walmart and other consumer staples with the Invesco S&P 500 Equal Weight Consumer Staples ETF (RHS). RHS offers exposure to the consumer staples sector of the U.S. economy, but with a unique twist: the fund tracks an equal-weighted index, meaning that component companies receive approximately equal allocations. That results in exposure that is considerably more balanced than other alternatives, according to VettaFi.
The fund has $645 million in assets under management and charges a 40 basis point expense ratio. RHS has accreted $165 million in year-to-date new flows as investors look to tilt exposure towards a low beta industry.
RHS has recouped losses from earlier in the year and is up 3.5% year to date. The fund is up 8.0% in the past year. While shares of Walmart have surged 9.3% over one month, the fund is still down 2.7% year to date and down 6.7% over one year.
RHS has 34 holdings as of August 15, each weighted at around 3%.
Holdings include companies such as Costco Wholesale Corporation (COST), General Mills, Inc (GIS), Lamb Weston Holdings, Inc (LW), Keurig Dr. Pepper Inc (KDP), Brown-Forman Corporation (BF.B), Clorox Company (CLX), Estee Lauder Companies Inc (EL), and Hormel Foods Corporations (HRL).
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