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Consumer Staples ETF (VDC) Hits New 52-Week High

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For investors seeking momentum, Vanguard Consumer Staples ETF (VDC - Free Report) is probably on radar. The fund just hit a 52-week high and is up about 20% from its 52-week low price of $157.69/share.

But are more gains in store for this ETF? Let’s take a quick look at the fund and the near-term outlook on it to get a better idea on where it might be headed:

VDC in Focus

VDC focuses on the consumer staples segment of the U.S. market. The fund has a large-cap focus with key holdings in household products, soft drinks, hypermarkets & super centers and packaged foods & meats. It charges investors 10 basis points a year in fees and has top holdings in Procter & Gamble (PG - Free Report) , Coca-Cola (KO - Free Report) and PepsiCo (PEP - Free Report) (see: all the Consumer Staples ETFs here).

Why the Move?

The consumer staples sector has been an area to watch lately given the return of volatility in the stock market due to a surge in the Delta variant cases of COVID-19 and a slowdown in China’s economy. This is because the consumer staples sector sees steady demand in the event of an economic downturn due to its low level of correlation with economic cycles. Additionally, low rates are acting as catalysts for the sector, leading to an increase in consumer spending power on a wide range of products. All these factors make the consumer segment a great place to stay invested in.

More Gains Ahead?

Currently, VDC has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook. Therefore, it is hard to get a handle on its future returns one way or the other. However, many of the segments that make up this ETF have a strong Zacks Industry Rank. So, there is definitely some promise for those who want to ride this surging ETF a little further.

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