Rising yields and the fear of inflation are starting to add more volatility back into the capital markets. Investors can protect their portfolio’s stability and diversification with funds like the Invesco S&P SmallCap Consumer Discretionary ETF (PSCD) and the Invesco S&P 500 Equal Weight Consumer Staples ETF (RHS).
PSCD offers exposure to the consumer discretionary sector of the U.S. economy, making PSCD one of many options available for accessing a sector that includes restaurants, automakers, and retailers. Given the sector-specific focus of PSCD, this fund might have tremendous appeal to those building a long-term, buy-and-hold portfolio. Many PSCD holdings are already included in small cap equity funds.
This ETF may be useful for those looking to establish a tactical tilt towards the consumer discretionary sector, perhaps in anticipation of a bull market. The fund is up almost 60% the past few months.
A recent Investorplace article highlighted one of PSCD’s holdings, Bed Bath & Beyond:
“PSCD is the ETF substitute for Bed Bath & Beyond, the home furnishings retailer that’s been undertaking a major turnaround over the past year under the stern hand of chief executive officer Mark Tritton,” the article said. “CEO Tritton joined the struggling retailer in November 2019 after serving as the chief merchandising officer at Target for 3.5 years.”
An Equal Weight Option
RHS seeks to track the investment results of the S&P 500® Equal Weight Consumer Staples Index. The underlying index is composed of all of the components of the S&P 500® Consumer Staples Index, an index that contains the common stocks of all companies included in the S&P 500® Index that are classified as members of the consumer staples sector, as defined according to the Global Industry Classification Standard (GICS).
The Investorplace article also mentioned RHS.
“Walgreens Boots Alliance made news in early February when it announced it was hiring Starbucks Chief Operating Officer Rosalind Brewer as its new CEO. Brewer is the first Black woman to head a Fortune 500 company,” the Investorplace article said. “Highly thought of in corporate America, Brewer will be paid handsomely to get the country’s second-largest drug store chain growing again. In addition to a $4.5 million signing bonus, Brewer gets a long-term incentive award of $20.2 million, an annual salary of $1.5 million, and an annual cash bonus of up to 200% of her annual salary.”
“High-profile CEO hirings don’t often work,” the article added further. “To protect against that happening, an investment in Invesco’s equal-weight consumer staples ETF gives you exposure to WBA stock plus a diversified portfolio of 33 S&P 500 consumer staples stocks besides.”
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