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Top 10 Consumer Staples ETFs

Stock quotes in this article: XLP, VDC, IYK, PSL, FXG, KXI, RHS

RHS (Rydex S&P Equal Weight Consumer Staples ETF) follows the S&P Equal Weight Consumer Staples Index which as the name implies just breaks down the same sector ETF as XLP into equal weights. The fund was launched in November 2006. The expense ratio is .50%. AUM equal $25 million with average daily trading volume of 7.3K shares. The fund has struggled from a marketing perspective given company ownership changes which left it adrift for a period. This could now change with new ownership. As of late July 2011 the annual dividend was $.91 making the current yield 1.44% and YTD return 10.75%.

Data as of July 2011

RHS Top Ten Holdings & Weightings

  1. Whole Foods Market, Inc. (WFM):  2.72%
  2. Supervalu Inc. (SVU):  2.61%
  3. Estee Lauder Companies A (EL):  2.58%
  4. Tyson Foods, Inc. A (TSN):  2.56%
  5. ConAgra Foods, Inc. (CAG):  2.51%
  6. Mead Johnson Nutrition Company (MJN):  2.50%
  7. Dr Pepper Snapple Group, Inc. (DPS):  2.49%
  8. The Kroger Co (KR):  2.48%
  9. Safeway Inc. (SWY):  2.48%
  10. Hormel Foods Corporation (HRL):  2.46%

PBJ (PowerShares Dynamic Food & Beverage ETF) follows the Dynamic Food & Beverage Intellidex Index which another "enhanced" index from PowerShares that is more active in using quantitative analysis to select and manage the index. The fund was launched in June 2005. The expense ratio is .60%. AUM equal $290 million and average daily trading volume is 180K shares. As of late July 2011 the annual dividend yield was $.46 making the current yield 2.24% and YTD return 11.74%.

Data as of July 2011

PBJ Top Ten Holdings & Weightings

  1. Starbucks Corporation (SBUX):  5.14%
  2. PepsiCo, Inc. (PEP):  5.07%
  3. Mead Johnson Nutrition Company (MJN):  5.07%
  4. Yum Brands, Inc. (YUM):  5.02%
  5. H.J. Heinz Company (HNZ):  4.98%
  6. McDonald's Corporation (MCD):  4.97%
  7. General Mills, Inc. (GIS):  4.86%
  8. Coca-Cola Company (KO):  4.71%
  9. Darling International, Inc. (DAR):  3.36%
  10. Krispy Kreme Doughnut Corporation (KKD):  3.27%

ECON (EG Shares DJ Emerging Market Consumer ETF) follows the Dow Jones Emerging Markets Titans Index which is a market cap weighted index of the 30 leading emerging market companies in both consumer goods and services.  The fund was launched in September 2010. The expense ratio is .85%. AUM equal $225 million and average daily trading volume is 83K shares. As of late July 2011 the annual dividend was $.02 making the current yield negligible and YTD return 2.79%.

Data as of July 2011

ECON Top Ten Holdings & Weightings

  1. AmBev ADR (ABV):  10.30%
  2. Wal-Mart De Mexico SAB de CV (WALMEX V):  6.93%
  3. Naspers, Ltd. (NPN):  6.09%
  4. Astra International Tbk:  5.94%
  5. ITC Ltd. (500875):  5.75%
  6. Grupo Televisa SA (TLEVISA CP): 5.56%
  7. Fomento Económico Mexicano, S.A.B. De C.V. (FEMSA UBD):  4.82%
  8. Falabella Sociedad Anomina Comercial E Industrial:  4.63%
  9. BRF - Brasil Foods SA ADR (BRFS):  4.62%
  10. Cencosud SA:  4.26%

IPS (SPDR S&P International Consumer Staples ETF) follows the S&P Developed ex-U.S. BMI Consumer Staples Sector Index which represents non-U.S. consumer staples companies with market capitalizations of at least $100 million. The fund was launched in July 2008. The expense ratio is .50%. AUM equal $19 million and average daily trading volume is just under 10K shares. As of late July 2011 the annual dividend was $.67 making the current yield 2.05% and YTD return 5.27%.

Data as of July 2011

IPS Top Ten Holdings & Weightings

  1. Nestle SA (NESN):  16.28%
  2. British American Tobacco PLC (BATS):  6.21%
  3. Unilever NV (UNA):  4.29%
  4. Diageo PLC (DGE):  3.95%
  5. Tesco PLC (TSCO):  3.75%
  6. Danone (BN):  3.74%
  7. Anheuser-Busch InBev SA (AHBIF):  3.48%
  8. Unilever PLC (ULVR):  3.42%
  9. Wesfarmers Limited (WES):  3.39%
  10. Woolworths Limited (WOW):  3.29%

The consumer staples sector has enjoyed a positive first half of 2011 particularly as it remains a defensive sector for investors when markets became more volatile and difficult. Internationally an expanding consumer sector marked by positive demographics has and will help this sector expand.  

There is a lot to choose from in terms of indexes linked to ETFs. Some are passive and duplicative relatively. It's essential to remember it's really a game of battleship for sponsors seeking to be first to a sector space or just being competitive in the space. This is their business interest apart from your investment interest. You should always ignore their interests and align your choices with what serves your objectives best.

Investors should note that in a rising market particularly ETFs linked to enhanced issues will tend to outperform conventional index linked issues. I've not done enough analysis to determine their relative performance during down market periods.

New ETFs from highly regarded and substantial new providers are also being issued. These may include Charles Schwab's ETFs and Scottrade's Focus Shares which both are issuing new ETFs with low expense ratios and commission free trading at their respective firms. These may also become popular as they become seasoned. 

For further information about portfolio structures using this or other ETFs see www.etfdigest.com .

You may address any feedback to: feedback@etfdigest.com   

 

(Source for holding data is from ETF Database and from various sponsors.)

This commentary comes from an independent investor or market observer as part of TheStreet guest contributor program. The views expressed are those of the author and do not necessarily represent the views of TheStreet or its management.

Dave Fry is founder and publisher of ETF Digest, Dave's Daily blog and the best-selling book author of Create Your Own ETF Hedge Fund, A DIY Strategy for Private Wealth Management, published by Wiley Finance in 2008. A detailed bio is here: Dave Fry.

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