Top 10 Consumer Staples ETFs

NEW YORK (ETF Digest) -- Consumer staples are considered a more conservative and defensive sector. After all, no matter the economic conditions people still need "stuff" from soap to toothpaste. The earnings growth rate for these companies is more limited due to intensive competition as big box retailers have forced prices to remain lower. Big box retailers (Walmart and others) have also been able to dictate pricing terms to suppliers putting a squeeze on them. This has kept consumer prices lower no matter the pressure it puts on the small drug store around the corner.

A defensive sector like Consumer Staples will outperform when equity markets are more bearish and underperform when bullish. They will trend in the same manner overall but still with less beta or volatility since as indicated, even the worst of times, people will need stuff.

There is a wide array of ETFs devoted to the sector providing U.S. and global exposure. Most are linked to established 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

New issues are coming to market consistently (especially globally) and sometimes these issues will need to become more seasoned before they may be included in our listings.

We feature a technical view of conditions from monthly chart views. Simplistically, we recommend longer-term investors stay on the right side of the 12 month simple moving average. When prices are above the moving average, stay long, and when below remain in cash or short if suitable to your tastes. Premium members to the ETF Digest receive added signals when markets become extended such as DeMark triggers to exit overbought/oversold conditions.

 

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.

#10: SPDR S&P International Consumer Staples ETF (IPS)

IPS 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 $18 million and average daily trading volume is 10K shares.

As of mid-February 2012 the annual dividend yield was 2.72% and YTD 1.44%. The one year return was 8.59%.

Data as of First Quarter 2012

IPS Top Ten Holdings & Weightings

1. Nestle SA (NESN): 15.42%
2. British American Tobacco PLC (BATS): 7.02%
3. Unilever NV (UNA): 4.67%
4. Diageo PLC (DGE): 4.59%
5. Anheuser-Busch InBev SA (AHBIF): 3.92%
6. Unilever PLC (ULVR): 3.68%
7. Wesfarmers Limited (WES): 3.49%
8. Danone (BN): 3.33%
9. Tesco PLC (TSCO): 3.15%
10. Imperial Tobacco Group PLC (IMT): 3.10%

#9: Rydex S&P Equal Weight Consumer Staples ETF (RHS)

RHS 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 $30 million with average daily trading volume of 7K 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 mid-February 2012 the annual dividend yield was 2.77% and YTD 1.05%. The one year return was 14.72%.

Data as of First Quarter 2012

RHS Top Ten Holdings & Weightings

1. Whole Foods Market, Inc. (WFM): 2.59%
2. CVS Caremark Corp (CVS): 2.58%
3. Estee Lauder Cos Inc A (EL): 2.51%
4. Avon Products Inc (AVP): 2.50%
5. Safeway Inc. (SWY): 2.48%
6. Beam Inc (BEAM): 2.47%
7. Constellation Brands Inc. A (STZ): 2.47%
8. Clorox Company (CLX): 2.47%
9. Wal-Mart Stores Inc (WMT): 2.46%
10. Coca-Cola Enterprises Inc (CCE): 2.45%

#8: PowerShares Dynamic Consumer Staples ETF (PSL)

 

PSL follows the Dynamic Consumer Staples Sector Intellidex Index which is considered an "enhanced" index since it uses proprietary quantitative analysis to more actively deploy and manage constituents. Of some interest are the more even weightings of the holdings versus others already listed. The fund was launched in October 2010. The expense ratio is .60%. AUM equal $38 million with average daily trading volume of 7K shares. As of mid-February 2012 the annual dividend yield was 1.48% and YTD 1.70%. The one year return was 11.94%.

Another choice from the same sponsor is PSCC which follows the S&P SmallCap 600 Consumer Staples Index. The fund was launched in April 2010. Its expense ratio is .29%. AUM equal $13 million and average daily trading volume is 10K shares. As of late July 2011 the yield was just under 3% and YTD return 5.87%.

Data as of First Quarter 2012

PSL Top Ten Holdings & Weightings

1. CVS Caremark Corp (CVS): 2.54%
2. Philip Morris International, Inc. (PM): 2.52%
3. Procter & Gamble Co (PG): 2.51%
4. Kraft Foods Inc (KFT): 2.50%
5. Altria Group Inc. (MO): 2.50%
6. HJ Heinz Company (HNZ): 2.48%
7. Coca-Cola Co (KO): 2.48%
8. Kimberly-Clark Corporation (KMB): 2.46%
9. Colgate-Palmolive Company (CL): 2.44%
10. General Mills, Inc. (GIS): 2.42%

#7: PowerShares Dynamic Food & Beverage ETF (PBJ)

PBJ 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 $130 million and average daily trading volume is 135K shares. As of mid-February 2012 the annual dividend yield was .96% and YTD 1.88%. The one year return was 7.75%.

Data as of First Quarter 2012

PBJ Top Ten Holdings & Weightings

1. The Hershey Company (HSY): 5.09%
2. Kroger Co (KR): 4.99%
3. McDonald's Corporation (MCD): 4.97%
4. Kraft Foods Inc (KFT): 4.97%
5. HJ Heinz Company (HNZ): 4.93%
6. Coca-Cola Co (KO): 4.93%
7. General Mills, Inc. (GIS): 4.82%
8. Mead Johnson Nutrition Company (MJN): 4.42%
9. Cal-Maine Foods, Inc. (CALM): 2.92%
10. B&G Foods Inc (BGS): 2.90%

#6: First Trust Consumer Staples ETF (FXG)

 

FXG follows the StrataQuant Consumer Staples Index which is another "enhanced" index which employs the AlphaDEX stock selection methodology to select consumer staples stocks from the Russell 1000. The fund was launched in May 2007. The expense ratio is .70%.

AUM equal $205 million with average daily trading volume of 185K shares. As of mid-February 2012 the annual dividend yield was .76% and YTD 2.79%. The one year return was 12.19%.

Data as of First Quarter 2012

FXG Top Ten Holdings & Weightings

1. Smithfield Foods, Inc. (SFD): 5.58%
2. Tyson Foods, Inc. A (TSN): 5.33%
3. Hormel Foods Corporation (HRL): 4.86%
4. Whole Foods Market, Inc. (WFM): 4.78%
5. Hansen Natural Corporation (MNST): 4.73%
6. Herbalife, Ltd. (HLF): 4.32%
7. Archer-Daniels Midland Company (ADM): 4.14%
8. Constellation Brands Inc. A (STZ): 4.12%
9. Kroger Co (KR): 3.96%
10. ConAgra Foods, Inc. (CAG): 3.91%

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