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Top 10 Consumer Staples ETFs

Our goal in this profile is to help investors wade through the many competing ETF offerings available. Using our long experience as an ETF publication, and nearly 40 years in the investment business, we can help select those ETFs that matter and may or may not be repetitive from one issuer to another. The result is a more manageable list of issues from which to view and make selections.

There is currently an expanding list of 20 ETFs oriented to the consumer staples sector with more on the way. The following analysis features a fair representation of ETFs available. We believe from these investors may choose an appropriate ETF to satisfy the best index-based offerings individuals and financial advisors may utilize.

We're not ranking these ETFs favoring one over another so don't let the listing order mislead you. Although we may use some of these in ETF Digest portfolios it's not our intention to recommend one over another.

ETFs are based on indexes tied to well-known index providers including Russell, S&P, Barclays, MSCI, Dow Jones, Wisdom Tree, PowerShares, EG Shares and so forth. Also included are some so-called "enhanced" indexes that attempt to achieve better performance through more active management of the index.

Where competitive issues exist and/or repetitive issues available at a fee cost saving we mention those as other choices. New issues are coming to market consistently (especially globally) and sometimes these issues will need to become more seasoned before they may be included at least in our listings.

For traders and investors wishing to hedge, leveraged and inverse issues are available to utilize from ProShares and Direxion and where available these are noted.

XLP (SPDR Consumer Staples Select Sector ETF) covers the Consumer Staples Select Sector Index which includes food and staples retailing, household products, beverages, tobacco and personal products. The fund was launched in December 1998. The expense ratio is .20%. AUM (Assets under Management) equal $4.1 billion with average daily trading volume of 8.5M shares.

As of late July 2011 the annual dividend was $.66 making the current yield 2.05% and YTD return 7.60%.

For traders and investors wishing to hedge, leveraged and inverse issues are available closely matching XLP's performance to utilize from ProShares and Direxion Shares.

Data as of July

XLP Top Ten Holdings & Weightings

  1. Procter & Gamble Company (PG):  14.27%
  2. Philip Morris International, Inc. (PM):  9.55%
  3. Wal-Mart Stores, Inc. (WMT):  8.16%
  4. Coca-Cola Company (KO):  7.26%
  5. Kraft Foods Inc (KFT):  4.98%
  6. CVS Caremark Corp (CVS):  4.59%
  7. PepsiCo, Inc. (PEP):  4.50%
  8. Altria Group Inc. (MO):  4.45%
  9. Colgate-Palmolive Company (CL):  3.75%
  10. Walgreen Company (WAG):  3.31%

VDC (Vanguard Consumer Staples ETF) follows the MSCI US Investable Market Consumer Staples 25/50 Index covering the entire spectrum of food, personal products, tobacco, beverage, drug stores and mega centers. The fund was launched in January 2004. The expense ratio is .25%. AUM equal $760 billion and average daily trading volume is 63K shares. As of late July 2011 the annual dividend was $1.91 making the current yield 2.35% and YTD return 10%.

Data as of July 2011

VDC Top Ten Holdings & Weightings

  1. Procter & Gamble Company (PG):  12.43%
  2. Coca-Cola Company (KO):  9.80%
  3. Philip Morris International, Inc. (PM):  8.28%
  4. Wal-Mart Stores, Inc. (WMT):  7.20%
  5. PepsiCo, Inc. (PEP):  7.02%
  6. Kraft Foods, Inc. (KFT):  4.16%
  7. Altria Group Inc. (MO):  4.12%
  8. CVS Caremark Corp (CVS):  3.59%
  9. Colgate-Palmolive Company (CL):  3.01%
  10. Walgreen Company (WAG):  2.87%

IYK (iShares DJ U.S. Consumer Goods ETF) follows the Dow Jones U.S. Consumer Goods Index. The fund was launched in June 2006. The expense ratio is .48%. AUM equal $348 million and average daily trading volume is 56K shares. As of late July 2011 the annual dividend was $1.33 making the current yield 1.90% and YTD return of 7.60%.

An alternative choice is FCD (FocusShares Morningstar Consumer Defensive ETF) which is a venture of Scottrade and Morningstar featuring a lower expense ratio (.19%) and no trading commissions for Scottrade customers. You'll no doubt see something similar coming from Schwab soon enough.

Data as of July 2011

IYK Top Ten Holdings & Weightings

  1. Procter & Gamble Company (PG):  12.14%
  2. Coca-Cola Company (KO):  9.77%
  3. Philip Morris International, Inc. (PM):  8.10%
  4. PepsiCo, Inc. (PEP):  7.64%
  5. Kraft Foods Inc (KFT):  3.89%
  6. Altria Group Inc. (MO):  3.75%
  7. Ford Motor Co (F):  3.51%
  8. Colgate-Palmolive Company (CL):  2.94%
  9. Monsanto Company (MON):  2.68%
  10. Johnson Controls, Inc. (JCI):  1.91%

  
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