Best Consumer Staples ETFs for Q4 2022

FXG, FTXG, and PBJ are the best consumer staples ETFs for Q4 2022

Consumer staples products are those that consumers are unwilling or unable to cut out of their budgets, regardless of their financial difficulties or the state of the economy. The category includes products like food and beverages, household goods, and hygiene products, as well as alcohol and tobacco. These types of goods are considered basic necessities that consumers will buy in good or bad economic times.

Thus, consumer staples stocks tend to be relatively more stable and less volatile compared to other segments of the equity markets. Investors looking for broad exposure to the consumer staples sector might look to exchange-traded funds (ETFs) focused on this area.

Key Takeaways

  • The consumer staples sector outperformed the broader market over the past year.
  • The consumer staples exchange-traded funds (ETFs) with the best one-year trailing total returns are FXG, FTXG, and PBJ.
  • The top holding of these ETFs is Mckesson Corporation in the first fund, Kellogg Company in the second fund, and General Mills Inc. in the third fund.

There are 13 consumer staples ETFs that trade in the U.S., excluding inverse and leveraged ETFs as well as funds with less than $50 million in assets under management (AUM). The consumer staples sector, as measured by the S&P 500 Consumer Staples Sector Index, has outperformed the broader market over the past 12 months, with a total return of 7.0% compared to the S&P 500's total return of -7.9%, as of Aug. 26, 2022.

The best-performing consumer staples ETF, based on performance over the past year, is the First Trust Consumer Staples AlphaDEX Fund (FXG). We examine the three best consumer staples ETFs below. All numbers below are as of Aug. 29, 2022.

First Trust Consumer Staples AlphaDEX Fund (FXG)

  • Performance Over One Year: 13.0%
  • Expense Ratio: 0.64%
  • Annual Dividend Yield: 1.37%
  • Three-Month Average Daily Volume: 169,848
  • Assets Under Management: $669.1 million
  • Inception Date: May 8, 2007
  • Issuer: First Trust

FXG tracks the StrataQuant Consumer Staples Index. The index focuses on choosing particular stocks from within the Russell 1000 Index based on price appreciation and growth factors in three, six, and twelve-month increments. The stocks carry equal weight in each quintile within the index. The blended multi-cap fund is primarily composed of stocks that fall into the category of consumer non-durable goods, retail trade, and process industries.

The top three holdings of FXG are Mckesson Corporation (MCK), a healthcare company focused on the production of pharmaceutical drugs and medical devices; Performance Food Group Company (PFGC), a food distribution company that supplies products to locations such as restaurants, health facilities, and schools; and Darling Ingredients Inc. (DAR), a company that develops and distributes ingredients for bio-nutrient supplements.

First Trust Nasdaq Food & Beverage ETF (FTXG)

  • Performance Over One Year: 12.6%
  • Expense Ratio: 0.60%
  • Annual Dividend Yield: 1.36%
  • Three-Month Average Daily Volume: 120,117
  • Assets Under Management: $907.8 million
  • Inception Date: Sept. 20, 2016
  • Issuer: First Trust

FTXG tracks the Nasdaq U.S. Smart Food & Beverage Index. It is a modified factor-weighted index composed of stocks that meet criteria based on factors such as volatility, growth, and value. FTXG is a blended multi-cap fund. Over 75% of the fund comprises stocks within the consumer non-durables sector. Companies that specialize in consumer goods distribution and agriculture are included in this fund.

The top three holdings of FTXG are Kellogg Company (K), a company that sells and manufactures snack foods; Archer-Daniels-Midland Co. (ADM), a multinational food processing and commodities trading company; and Class B shares of Molson Coors Beverage Company (TAP), which is focused on selling, manufacturing, and distributing alcoholic products such as beer and other malt beverages.

Invesco Dynamic Food & Beverage ETF (PBJ)

  • Performance Over One Year: 11.2%
  • Expense Ratio: 0.63%
  • Annual Dividend Yield: 1.04%
  • Three-Month Average Daily Volume: 85,248
  • Assets Under Management: $330.2 million
  • Inception Date: June 23, 2005
  • Issuer: Invesco

PBJ seeks to track the Dynamic Food & Beverage Intellidex Index, an index including 30 U.S.-based food and beverage companies selected for price momentum, earnings momentum, quality, management action, and value. The multi-cap ETF uses a blended approach, investing in a mix of growth and value stocks. Besides companies engaged in manufacturing and distributing food and beverage products, the fund also includes agricultural products companies and food technology stocks.

The top three holdings of PBJ include General Mills Inc. (GIS), a worldwide market leader in the production of branded retail food products; Keurig Dr Pepper Inc. (KDP), an internationally operating company that produces name-brand beverages; and Sysco Corporation (SYY), a food service company that distributes food products to restaurants and other facilities through its subsidiaries.

The comments, opinions, and analyses expressed herein are for informational purposes only and should not be considered individual investment advice or recommendations to invest in any security or adopt any investment strategy. While we believe the information provided herein is reliable, we do not warrant its accuracy or completeness. The views and strategies described in our content may not be suitable for all investors. Because market and economic conditions are subject to rapid change, all comments, opinions, and analyses contained within our content are rendered as of the date of the posting and may change without notice. The material is not intended as a complete analysis of every material fact regarding any country, region, market, industry, investment, or strategy.

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