If you're interested in broad exposure to the Consumer Staples - Broad segment of the equity market, look no further than the Vanguard Consumer Staples ETF (
VDC Quick Quote VDC - Free Report) , 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 14, placing it in bottom 13%.
The fund is sponsored by Vanguard. It has amassed assets over $6.40 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.
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 least expensive products in the space.
It has a 12-month trailing dividend yield of 2.27%.
Sector Exposure and Top Holdings
ETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
Looking at individual holdings, Procter & Gamble Co. (
PG Quick Quote PG - Free Report) accounts for about 13.87% of total assets, followed by Coca-Cola Co. ( KO Quick Quote KO - Free Report) and Pepsico Inc. ( PEP Quick Quote PEP - Free Report) .
The top 10 holdings account for about 63.19% of total assets under management.
Performance and Risk
The ETF has lost about -5.34% and is up roughly 6.12% so far this year and in the past one year (as of 06/27/2022), respectively. VDC has traded between $177.06 and $208.31 during this last 52-week period.
The ETF has a beta of 0.61 and standard deviation of 19.44% for the trailing three-year period, making it a medium risk choice in the space. With about 99 holdings, it effectively diversifies company-specific risk.
Vanguard Consumer Staples ETF sports a Zacks ETF Rank of 4 (Sell), which is based on expected asset class return, expense ratio, and momentum, among other factors. VDC, then, is not a suitable option for investors seeking exposure to the Consumer Staples ETFs segment of the market. However, there are better ETFs in the space to consider.
IShares U.S. Consumer Staples ETF (
IYK Quick Quote IYK - Free Report) tracks Dow Jones U.S. Consumer Goods Index and the Consumer Staples Select Sector SPDR ETF ( XLP Quick Quote XLP - Free Report) tracks Consumer Staples Select Sector Index. IShares U.S. Consumer Staples ETF has $1.35 billion in assets, Consumer Staples Select Sector SPDR ETF has $15.68 billion. IYK has an expense ratio of 0.41% and XLP charges 0.10%. Bottom Line
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