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Should You Invest in the Vanguard Consumer Staples ETF (VDC)?
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Launched on 01/26/2004, the Vanguard Consumer Staples ETF (VDC - Free Report) is a passively managed exchange traded fund designed to provide a broad exposure to the Consumer Staples - Broad segment of the equity market.
While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.
Sector ETFs also provide investors access to a broad group of companies in particular sectors that offer low risk and diversified exposure. Consumer Staples - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 11, placing it in bottom 31%.
Index Details
The fund is sponsored by Vanguard. It has amassed assets over $6.85 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
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are 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 2.21%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. 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 100% of the portfolio.
Looking at individual holdings, Procter & Gamble Co. (PG - Free Report) accounts for about 13.19% of total assets, followed by Coca-Cola Co. (KO - Free Report) and Pepsico Inc. (PEP - Free Report) .
The top 10 holdings account for about 62.22% of total assets under management.
Performance and Risk
Year-to-date, the Vanguard Consumer Staples ETF has lost about -2.95% so far, and is up about 5.81% over the last 12 months (as of 08/29/2022). VDC has traded between $177.06 and $208.31 in this past 52-week period.
The ETF has a beta of 0.58 and standard deviation of 19.33% for the trailing three-year period, making it a medium risk choice in the space. With about 105 holdings, it effectively diversifies company-specific risk.
Alternatives
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 the best 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 - 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 $1.57 billion in assets, Consumer Staples Select Sector SPDR ETF has $16.14 billion. IYK has an expense ratio of 0.41% and XLP charges 0.10%.
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)?
Launched on 01/26/2004, the Vanguard Consumer Staples ETF (VDC - Free Report) is a passively managed exchange traded fund designed to provide a broad exposure to the Consumer Staples - Broad segment of the equity market.
While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.
Sector ETFs also provide investors access to a broad group of companies in particular sectors that offer low risk and diversified exposure. Consumer Staples - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 11, placing it in bottom 31%.
Index Details
The fund is sponsored by Vanguard. It has amassed assets over $6.85 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
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are 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 2.21%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. 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 100% of the portfolio.
Looking at individual holdings, Procter & Gamble Co. (PG - Free Report) accounts for about 13.19% of total assets, followed by Coca-Cola Co. (KO - Free Report) and Pepsico Inc. (PEP - Free Report) .
The top 10 holdings account for about 62.22% of total assets under management.
Performance and Risk
Year-to-date, the Vanguard Consumer Staples ETF has lost about -2.95% so far, and is up about 5.81% over the last 12 months (as of 08/29/2022). VDC has traded between $177.06 and $208.31 in this past 52-week period.
The ETF has a beta of 0.58 and standard deviation of 19.33% for the trailing three-year period, making it a medium risk choice in the space. With about 105 holdings, it effectively diversifies company-specific risk.
Alternatives
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 the best 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 - 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 $1.57 billion in assets, Consumer Staples Select Sector SPDR ETF has $16.14 billion. IYK has an expense ratio of 0.41% and XLP charges 0.10%.
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.