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Invesco S&P 500 Equal Weight Consumer Discretionary ETF (RCD)

NYSEArca - NYSEArca Delayed Price. Currency in USD
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119.41-1.30 (-1.07%)
At close: 3:42PM EST
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Trade prices are not sourced from all markets
Previous Close120.71
Open120.07
Bid112.29 x 1200
Ask119.49 x 1300
Day's Range118.55 - 120.07
52 Week Range55.72 - 120.74
Volume18,276
Avg. Volume43,916
Net Assets281.45M
NAV119.42
PE Ratio (TTM)N/A
Yield1.35%
YTD Daily Total Return9.77%
Beta (5Y Monthly)1.55
Expense Ratio (net)0.40%
Inception Date2006-11-01
  • Casinos, Like Airlines, Are Best Avoided for Now
    InvestorPlace

    Casinos, Like Airlines, Are Best Avoided for Now

    The last time I wrote about MGM Resorts (NYSE:MGM) and MGM stock was in mid-June. The company's Las Vegas casinos were starting to open up and business would soon return to normal. Investors were cautiously optimistic. Source: Jason Patrick Ross / Shutterstock.com However, since then, it's become clear the novel coronavirus isn't going away any time soon. In fact, it might be stronger than ever. As a result, MGM stock has lost its momentum and is struggling to stay in the mid- to high-teens. Reopening Hasn't Been a Slam DunkIn my June 18 article, I said that given the difficulties casinos would face when reopening their locations -- reduced capacities, increased cleaning, security, and labor costs -- MGM would likely see some downside as a result. And that's precisely what's happened. InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 7 Utilities Stocks to Buy With Reassuring Dividends For this reason, I recommended investors interested in betting on MGM consider the VanEck Vectors Gaming ETF (NASDAQ:BJK) instead. By playing the field, investors will win once casinos return to normal. Until then, a bet on BJK reduces your exposure to any one company. Unlike Amazon (NASDAQ:AMZN), which is a good proxy for consumer stocks, MGM Resorts isn't necessarily the best proxy for casinos. Who is, I couldn't say. What I do know is that none of the casino stocks stand out in terms of their ability to withstand Covid-19.As InvestorPlace's Brett Kenwell recently stated, MGM stock is a tough buy at the moment. I couldn't agree more. While I like the MGM brand, large gatherings have proven to be effective "super spreaders" during the pandemic. Nevada is reporting record daily highs for Covid-19 cases and now, casino properties, including MGM's Bellagio and Signature Condominiums, are being sued by employees for unsafe working conditions. Investors hate uncertainty. What could be more uncertain than a virus that's already killed almost 130,000 Americans? People are scared to go to work right now and that's especially true in hot spots in the South and Southwest. An Alternative to BJKA possible alternative for anyone who absolutely must make a bet on MGM, and doesn't want to buy BJK, would be to invest in the Invesco S&P 500 Equal Weight Consumer Discretionary ETF (NYSEARCA:RCD). It gives you 61 S&P 500 consumer discretionary stocks, all equal-weighted, and rebalanced four times a year in March, June, September, and December. At 0.40%, it's not cheap, but it does closely track the performance of the S&P 500 Equal Weight Consumer Discretionary Index. For some investors, the biggest downside of RCD is the fact it tends to overweight mid-cap stocks as a result of the equal weighting. For me, that makes it even more attractive, because I see mid-cap stocks as the sweet spot in terms of long-term performance. Each quarterly rebalance, the 61 stocks return to a weighting of 1.64%. As of June 29, MGM's weighting was 1.49%, a sign that it's retreated since its latest rebalance. Slightly more than half the holdings are currently above 1.64% with Gap (NYSE:GPS) doing the best this quarter with the only weighting over 2%. Year to date through June 29, RCD has a total return of -20.01%, less than half MGM's total return of -49.0%. The Bottom Line on MGM StockInvestorPlace contributor Mark Hake recently suggested that investors wait and see how MGM's reopenings perform before taking a bite out of MGM stock. "The problem right now is that there is no dividend yield. Investors receive little income while waiting for the stock to recover. Therefore, I would wait to see what the upcoming reopening results will bring. Are the high-end casinos and resorts booking sufficient revenue for the company to turn around?" Hake wrote on June 25. With the July 4 weekend coming up, investors should get a better idea of how fast MGM will bounce back. I'm skeptical that people are going to want to be in casinos when Nevada, Arizona, and California are setting record numbers of Covid-19 cases.If you can't make the ETF play to get your MGM exposure, I would wait until the fall before considering buying MGM stock. That's because another significant correction could be in store for stocks over the next two months. If that happens, stocks like MGM will face further downside.I don't believe the risk/reward is in your favor at the moment. Will Ashworth has written about investments full-time since 2008. Publications where he's appeared include InvestorPlace, The Motley Fool Canada, Investopedia, Kiplinger, and several others in both the U.S. and Canada. He particularly enjoys creating model portfolios that stand the test of time. He lives in Halifax, Nova Scotia. At the time of this writing Will Ashworth did not hold a position in any of the aforementioned securities. More From InvestorPlace * Why Everyone Is Investing in 5G All WRONG * America's 1 Stock Picker Reveals His Next 1,000% Winner * Revolutionary Tech Behind 5G Rollout Is Being Pioneered By This 1 Company * Radical New Battery Could Dismantle Oil Markets The post Casinos, Like Airlines, Are Best Avoided for Now appeared first on InvestorPlace.

  • How the CDC Put a Wrench in Royal Caribbean’s Plans
    InvestorPlace

    How the CDC Put a Wrench in Royal Caribbean’s Plans

    On June 16, the U.S. Centers for Disease Control and Prevention (CDC) said that it didn't know when it would give the green light for cruise ships to start sailing again. Royal Caribbean (NYSE:RCL) planned to be back in business on Aug. 1. However, the CDC's latest comments suggest fall might be a more likely scenario. RCL stock and the rest of the cruise operators took a hit on the news. Source: Laszlo Halasi / Shutterstock.com What was already a murky situation just got a whole lot murkier.If you are thinking about buying Royal Caribbean's stock on the dip, you might want to consider your options before doing so. InvestorPlace - Stock Market News, Stock Advice & Trading TipsThe easiest way to make a bet on RCL without exposing yourself to excessive company risk is to buy an ETF that owns the cruise operator. Why an ETF for RCL Stock?Recently, the ETF with the highest RCL weighting was the Invesco S&P 500 Equal Weight Consumer Discretionary ETF (NYSEARCA:RCD), at 2.22% of its portfolio, the second-largest holding behind Norwegian Cruise Line Holdings (NASDAQ:NCLH) at 2.25%, and just ahead of Carnival (NYSE:CCL) at 2.16%. Now, while it's true that a 2.22% weighting isn't all that much because it's equal-weighted, you're getting a bunch of the upside without all of the downsides.What do I mean by this?The ETF is equal-weighted. That means each of the 64 stocks starts out each quarter with an approximate weighting of 1.56%. All 64 are rebalanced at the end of the quarter, and then the process starts anew. * 10 Robotics Stocks on the Technological Cutting EdgeThe last would have been in March. The next one should be after the markets close on June 19. As you can see, RCL stock has generated 66 basis points of gains over the past three months - 2.22% less 1.56%. Not surprisingly, in the past three months from March 20 to June 17, Royal Caribbean's stock has more than doubled. A Risk That Is Industry-SpecificI know what you're thinking.If you wanted to bet $1,000 on RCL back in March around the time of the rebalance, today you'd have almost $2,500. If you had invested the same $1,000 in the ETF back in March, today, you'd only have about $1,500.However, the risk you would have taken buying RCL in March, when it might not be sailing for another four to eight months, was significantly higher than investing in 64 consumer discretionary stocks. Many of these companies had online revenue to reduce the pain inflicted by the novel coronavirus.So, unless you have a bunch of stocks in addition to RCL, to undertake the company- and industry-specific risk that presently exists for the cruise industry, to invest at this point is simply foolish. This is especially relevant when you consider that in 22 states, including Florida, Covid-19 is on the increase. Donald Trump might want to sweep this under the rug, but medical professionals can't - and they won't. In recent articles, I have argued that aggressive investors might take a flyer on the cruise stocks. But for everyone else who wants to sleep at night, RCL and its peers ought to be off-limits. Invesco's ETF provides you with an option. The Bottom Line on RCL StockAn analyst from Nomura Securities believes the CDC is to blame for the uncertainty in the cruise industry about when they can go back to sea. "The issue is not that the industry has been passive in developing health protocols. Quite the contrary. In our view, the hurdle lies with the CDC's unwillingness to discuss, debate and mutually implement the highest standards of passenger and crew healthcare," Nomura stated recently. "Their messaging seems to be don't even think about resuming operations, even if most businesses are reopening, resorts and casinos are welcoming guests, and airlines are taking off with many flights near capacity with not a peep of objection from the CDC."While it's true that the cruise lines do appear to be treated differently than American tax-paying companies, it's also true that cruise ships possess a unique set of issues that other travel-related businesses simply don't face.Yes, there have been packed flights, but those are generally for a short duration. As we've seen over the past three months, when things go wrong on cruise ships, they go abysmally wrong - not to mention, deadly. But I digress.Other cruise lines such as Disney (NYSE:DIS) have canceled sailings into October. That may soon be November or later. If you want to bet on Royal Caribbean, Invesco's ETF seems like a smarter way to play it.Will Ashworth has written about investments full-time since 2008. Publications where he's appeared include InvestorPlace, The Motley Fool Canada, Investopedia, Kiplinger, and several others in both the U.S. and Canada. He particularly enjoys creating model portfolios that stand the test of time. He lives in Halifax, Nova Scotia. At the time of this writing he did not hold a position in any of the aforementioned securities. More From InvestorPlace * Why Everyone Is Investing in 5G All WRONG * Top Stock Picker Reveals His Next 1,000% Winner * The 1 Stock All Retirees Must Own * Look What America's Richest Family Is Investing in Now The post How the CDC Put a Wrench in Royal Caribbeana€™s Plans appeared first on InvestorPlace.

  • Will Consumer Discretionary ETFs Suffer the Coronavirus Blow?
    Zacks

    Will Consumer Discretionary ETFs Suffer the Coronavirus Blow?

    We discuss how the rapidly spreading coronavirus can sneak in to your portfolio and hurt returns from holdings in the consumer discretionary sector.