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Top 10 Consumer Staples ETFs

Stocks in this article: IPS RHS PSL PBJ FXG

#5: EG Shares DJ Emerging Market Consumer ETF (ECON)

ECON 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 $352 million and average daily trading volume is 140K shares.

As of mid-February 2012 the annual dividend yield was .53% and YTD return 8.28%. The one year return was 11.92%.

Data as of First Quarter 2012

ECON Top Ten Holdings & Weightings

  1. Companhia de Bebidas das Americas Ambev ADR (ABV): 11.17%
  2. Naspers Ltd (NPN): 7.97%
  3. Wal - Mart de Mexico, S.A.B. de C.V. (WALMEX V): 7.69%
  4. Astra International Tbk (ASII): 7.58%
  5. BRF - Brasil Foods SA ADR (BRFS): 6.34%
  6. Fomento Economico Mexicano SAB de CV (FEMSA UBD): 6.10%
  7. Grupo Televisa, S.A. (TLEVISACPO): 4.65%
  8. S.A.C.I. Falabella (FALABELLA): 4.42%
  9. Cencosud SA (CENCOSUD): 4.19%
  10. Genting Bhd (3182): 3.92%

#4: iShares S&P Global Consumer Staples ETF (KXI)

KXI follows the S&P Global Consumer Staples Index which includes the U.S. and other nation's consumer staples issues. The fund was launched in September 2006. The expense ratio is .48%. AUM equal $459 million and average daily trading volume is 42K shares.

As of mid-February 2012 the annual dividend yield was 2.36% and YTD return 1.47%. The one year return was 12.51%.

Data as of First Quarter 2012

KXI Top Ten Holdings & Weightings

  1. Nestle SA (NESN): 7.72%
  2. Procter & Gamble Co (PG): 7.06%
  3. Coca-Cola Co (KO): 6.25%
  4. Philip Morris International, Inc. (PM): 5.30%
  5. Wal-Mart Stores Inc (WMT): 4.37%
  6. PepsiCo Inc (PEP): 4.18%
  7. British American Tobacco PLC (BATS): 3.69%
  8. Kraft Foods Inc (KFT): 2.76%
  9. Altria Group Inc. (MO): 2.38%
  10. Unilever NV (UNA): 2.33%

#3: iShares DJ U.S. Consumer Goods ETF (IYK)

IYK follows the Dow Jones U.S. Consumer Goods Index. The fund was launched in June 2006. The expense ratio is .48%. AUM equal $380 million and average daily trading volume is 48K shares. As of mid-February 2012 the annual dividend yield was 2.09% and YTD return 4.06%. The one year return was 11.27%.

An alternative choice is the FocusShares Morningstar Consumer Defensive ETF (FCD) 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 First Quarter 2012

IYK Top Ten Holdings & Weightings

Data as of First Quarter 2012

  1. Procter & Gamble Co (PG): 11.79%
  2. Coca-Cola Co (KO): 9.60%
  3. Philip Morris International, Inc. (PM): 8.94%
  4. PepsiCo Inc (PEP): 6.99%
  5. Kraft Foods Inc (KFT): 4.27%
  6. Altria Group Inc. (MO): 4.03%
  7. Ford Motor Co (F): 3.15%
  8. Monsanto Company (MON): 2.99%
  9. Colgate-Palmolive Company (CL): 2.76%
  10. Nike, Inc. B (NKE): 2.67%

#2: Vanguard Consumer Staples ETF (VDC)

VDC 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 $931 million and average daily trading volume is 96K shares. As of mid-February 2012 the annual dividend yield was 2.35% and YTD return 1.49%. The one year return was 14.82%

Data as of First Quarter 2012

VDC Top Ten Holdings & Weightings

  1. The Procter & Gamble Co (PG): 12.82%
  2. The Coca-Cola Co (KO): 9.96%
  3. Philip Morris International, Inc. (PM): 7.85%
  4. Wal-Mart Stores Inc (WMT): 6.87%
  5. PepsiCo Inc (PEP): 6.77%
  6. Altria Group Inc. (MO): 4.37%
  7. Kraft Foods Inc (KFT): 4.37%
  8. CVS Caremark Corp (CVS): 3.55%
  9. Colgate-Palmolive Company (CL): 3.39%
  10. Costco Wholesale Corporation (COST): 2.81%

#1: SPDR Consumer Staples Select Sector ETF (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 .19%.

AUM (Assets under Management) equal $4.9 billion with average daily trading volume of 7M shares. As of mid-February 2012 the annual dividend yield was 2.77% and YTD return 1.05%. The one year return was 14.72%

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

Data as of First Quarter 2012

XLP Top Ten Holdings & Weightings

  1. Procter & Gamble Co (PG): 13.78%
  2. Philip Morris International, Inc. (PM): 10.32%
  3. Wal-Mart Stores Inc (WMT): 8.52%
  4. Coca-Cola Co (KO): 7.14%
  5. Kraft Foods Inc (KFT): 5.38%
  6. CVS Caremark Corp (CVS): 4.84%
  7. Altria Group Inc. (MO): 4.64%
  8. PepsiCo Inc (PEP): 4.10%
  9. Colgate-Palmolive Company (CL): 3.81%
  10. Costco Wholesale Corporation (COST): 3.15%

Below is the methodology for ranking the ETFs within the category.

Strong established linked index
Excellent consistent performance and index tracking
Low fee structure
Strong portfolio suitability
Excellent liquidity

Established linked index even if "enhanced"
Good performance or more volatile if "enhanced" index
Average to higher fee structure
Good portfolio suitability or more active management if "enhanced" index
Decent liquidity

Enhanced or seasoned index
Less consistent performance and more volatile
Fees higher than average
Portfolio suitability would need more active trading
Average to below average liquidity

Index is new
Issue is new and needs seasoning
Fees are high
Portfolio suitability also needs seasoning
Liquidity below average

The consumer staples sector enjoyed a positive first half of 2011 but corrected with the overall market in the second half of the year. Since late November 2011 the market has recovered sharply and is now overbought as of this early 2012 report.

The consumer sector is marked by positive demographics overseas in emerging markets which has made ECON attractive even with the greater volatility. With the latter investors need to adopt more agile tactics as they should with enhanced index related ETFs.  

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.

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 technical indicators like DeMark and other indicators, take a free 14-day trial at ETF Digest . Follow us on Twitter and Facebook as well and join our group conversations.

You may address any feedback to:   

The ETF Digest has no current positions in any of the featured ETFs.

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

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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