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Should You Invest in the iShares Global Consumer Discretionary ETF (RXI)?

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Designed to provide broad exposure to the Consumer Discretionary - Broad segment of the U.S. equity market, the iShares Global Consumer Discretionary ETF (RXI) is a passively managed exchange traded fund launched on 09/12/2006.

Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.

Investor-friendly, sector ETFs provide many options to gain low risk and diversified exposure to a broad group of companies in particular sectors. Consumer Discretionary - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 13, placing it in bottom 19%.

Index Details

The fund is sponsored by Blackrock. It has amassed assets over $249.37 M, making it one of the average sized ETFs attempting to match the performance of the Consumer Discretionary - Broad segment of the U.S. equity market. RXI seeks to match the performance of the S&P Global 1200 Consumer Discretionary Sector Index before fees and expenses.

The S&P Global Consumer Discretionary Sector Index measures the performance of companies that are part of the consumer discretionary sector of the economy and that are important to global markets. It is a subset of the S&P Global 1200 Index. Components include consumer product manufacturing, service, media and retail companies.

Costs

Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.

Annual operating expenses for this ETF are 0.48%, making it on par with most peer products in the space.

It has a 12-month trailing dividend yield of 1.21%.

Sector Exposure and Top Holdings

It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.

Looking at individual holdings, Amazon Com Inc (AMZN) accounts for about 13.21% of total assets, followed by Home Depot Inc (HD) and Toyota Motor Corp (7203).

The top 10 holdings account for about 39.27% of total assets under management.

Performance and Risk

The ETF has gained about 3.62% so far this year and is up roughly 15.60% in the last one year (as of 05/04/2018). In that past 52-week period, it has traded between $98.03 and $119.68.

The ETF has a beta of 1.10 and standard deviation of 13.95% for the trailing three-year period, making it a low risk choice in the space. With about 194 holdings, it effectively diversifies company-specific risk.

Bottom Line

To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.


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