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Should You Invest in the Vanguard Consumer Staples ETF (VDC)?
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Designed to provide broad exposure to the Consumer Staples - Broad segment of the equity market, the Vanguard Consumer Staples ETF (VDC - Free Report) is a passively managed exchange traded fund launched on 01/26/2004.
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.
Sector ETFs are also funds of convenience, offering many ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. Consumer Staples - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 13, placing it in bottom 19%.
Index Details
The fund is sponsored by Vanguard. It has amassed assets over $6.57 billion, making it one of the largest ETFs attempting to match the performance of the Consumer Staples - Broad segment of the equity market. VDC seeks to match the performance of the MSCI US Investable Market Consumer Staples 25/50 Index before fees and expenses.
The MSCI US Investable Market Consumer Staples 25/50 Index measures the investment return of stocks in the consumer staples sector.
Costs
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Annual operating expenses for this ETF are 0.10%, making it one of the cheaper products in the space.
It has a 12-month trailing dividend yield of 2.49%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Consumer Staples sector--about 99.90% of the portfolio.
Looking at individual holdings, Procter & Gamble Co/the (PG - Free Report) accounts for about 12.69% of total assets, followed by Costco Wholesale Corp (COST - Free Report) and Coca-Cola Co/the (KO - Free Report) .
The top 10 holdings account for about 56.35% of total assets under management.
Performance and Risk
So far this year, VDC has added about 6.31%, and is up about 11.80% in the last one year (as of 03/20/2024). During this past 52-week period, the fund has traded between $175.13 and $203.01.
The ETF has a beta of 0.61 and standard deviation of 13.36% for the trailing three-year period, making it a medium risk choice in the space. With about 106 holdings, it effectively diversifies company-specific risk.
Alternatives
Vanguard Consumer Staples ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, VDC is a sufficient option for those seeking exposure to the Consumer Staples ETFs area of the market. Investors might also want to consider some other ETF options in the space.
IShares U.S. Consumer Staples ETF (IYK - Free Report) tracks Dow Jones U.S. Consumer Goods Index and the Consumer Staples Select Sector SPDR ETF (XLP - Free Report) tracks Consumer Staples Select Sector Index. IShares U.S. Consumer Staples ETF has $1.33 billion in assets, Consumer Staples Select Sector SPDR ETF has $15.39 billion. IYK has an expense ratio of 0.40% and XLP charges 0.09%.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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Should You Invest in the Vanguard Consumer Staples ETF (VDC)?
Designed to provide broad exposure to the Consumer Staples - Broad segment of the equity market, the Vanguard Consumer Staples ETF (VDC - Free Report) is a passively managed exchange traded fund launched on 01/26/2004.
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.
Sector ETFs are also funds of convenience, offering many ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. Consumer Staples - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 13, placing it in bottom 19%.
Index Details
The fund is sponsored by Vanguard. It has amassed assets over $6.57 billion, making it one of the largest ETFs attempting to match the performance of the Consumer Staples - Broad segment of the equity market. VDC seeks to match the performance of the MSCI US Investable Market Consumer Staples 25/50 Index before fees and expenses.
The MSCI US Investable Market Consumer Staples 25/50 Index measures the investment return of stocks in the consumer staples sector.
Costs
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Annual operating expenses for this ETF are 0.10%, making it one of the cheaper products in the space.
It has a 12-month trailing dividend yield of 2.49%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Consumer Staples sector--about 99.90% of the portfolio.
Looking at individual holdings, Procter & Gamble Co/the (PG - Free Report) accounts for about 12.69% of total assets, followed by Costco Wholesale Corp (COST - Free Report) and Coca-Cola Co/the (KO - Free Report) .
The top 10 holdings account for about 56.35% of total assets under management.
Performance and Risk
So far this year, VDC has added about 6.31%, and is up about 11.80% in the last one year (as of 03/20/2024). During this past 52-week period, the fund has traded between $175.13 and $203.01.
The ETF has a beta of 0.61 and standard deviation of 13.36% for the trailing three-year period, making it a medium risk choice in the space. With about 106 holdings, it effectively diversifies company-specific risk.
Alternatives
Vanguard Consumer Staples ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, VDC is a sufficient option for those seeking exposure to the Consumer Staples ETFs area of the market. Investors might also want to consider some other ETF options in the space.
IShares U.S. Consumer Staples ETF (IYK - Free Report) tracks Dow Jones U.S. Consumer Goods Index and the Consumer Staples Select Sector SPDR ETF (XLP - Free Report) tracks Consumer Staples Select Sector Index. IShares U.S. Consumer Staples ETF has $1.33 billion in assets, Consumer Staples Select Sector SPDR ETF has $15.39 billion. IYK has an expense ratio of 0.40% and XLP charges 0.09%.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.