Designed to provide broad exposure to the Consumer Staples - Broad segment of the equity market, the iShares U.S. Consumer Staples ETF (
IYK Quick Quote IYK - Free Report) is a passively managed exchange traded fund launched on 06/12/2000.
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are 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 Blackrock. It has amassed assets over $1.33 billion, making it one of the larger ETFs attempting to match the performance of the Consumer Staples - Broad segment of the equity market. IYK seeks to match the performance of the Dow Jones U.S. Consumer Goods Index before fees and expenses.
The Russell 1000 Consumer Staples RIC 22.5/45 Capped Index measures the performance of the consumer goods sector of the U.S. equity market.
When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.
Annual operating expenses for this ETF are 0.41%, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.81%.
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.
This ETF has heaviest allocation in the Consumer Staples sector--about 89.70% of the portfolio. Healthcare and Materials round out the top three.
Looking at individual holdings, Procter & Gamble (
PG Quick Quote PG - Free Report) accounts for about 16.60% of total assets, followed by Cocacola ( KO Quick Quote KO - Free Report) and Pepsico Inc ( PEP Quick Quote PEP - Free Report) .
The top 10 holdings account for about 64.95% of total assets under management.
Performance and Risk
The ETF has lost about -1.08% so far this year and is up about 9.25% in the last one year (as of 06/28/2022). In that past 52-week period, it has traded between $179.59 and $213.41.
The ETF has a beta of 0.80 and standard deviation of 21.57% for the trailing three-year period, making it a medium risk choice in the space. With about 58 holdings, it effectively diversifies company-specific risk.
IShares U.S. 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. IYK, then, is not a suitable option for investors seeking exposure to the Consumer Staples ETFs segment of the market. Instead, there are better ETFs in the space to consider.
Vanguard Consumer Staples ETF (
VDC Quick Quote VDC - Free Report) tracks MSCI US Investable Market Consumer Staples 25/50 Index and the Consumer Staples Select Sector SPDR ETF ( XLP Quick Quote XLP - Free Report) tracks Consumer Staples Select Sector Index. Vanguard Consumer Staples ETF has $6.39 billion in assets, Consumer Staples Select Sector SPDR ETF has $15.62 billion. VDC has an expense ratio of 0.10% and XLP charges 0.10%. Bottom Line
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