For investors seeking momentum, Vanguard Consumer Staples ETF (VDC - Free Report) is probably on radar now. The fund just hit a 52-week high and is up about 20.7% from its 52-week low price of $124.93/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, packaged foods & meats, and hypermarkets & super centers. It charges investors 10 basis points a year in fees and has top holdings in Procter & Gamble, Coca-Cola and PepsiCo (see: all the Consumer Staples ETFs here).
Why the Move?
The consumer staples sector has been an area to watch lately given the looming U.S.-China trade spat and global growth concerns. 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, hopes of Fed rate cuts act as catalysts for the sector since lower rates will increase 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 #1 (Strong Buy) with a Medium risk outlook, suggesting that the outperformance could continue in the months ahead. Further, many of the segments that make up this ETF have a strong Zacks Industry Rank, so there is definitely still some promise for those who want to ride on this surging ETF a little longer.
Want key ETF info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week. Get it free >>