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 economic times and in bad ones. Thus, the 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.
- The consumer staples sector significantly underperformed the broader market over the past year.
- The ETFs with the best 1-year trailing total return are IYK, PSL, and IEV.
- The top holdings of these ETFs are Tesla Inc., class A shares of Coty Inc., and Nestle S.A., respectively.
There are 11 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 underperformed the broader market with a total return of 24.7% over the past 12 months compared to the S&P 500's total return of 49.0%, as of May 4, 2021. The best-performing consumer staples ETF for Q3 2021, based on performance over the past year, is the iShares U.S. Consumer Goods ETF (IYK). We examine the top 3 best consumer staples ETFs below. All numbers below are as of May 5, 2021.
- Performance over 1-Year: 56.7%
- Expense Ratio: 0.43%
- Annual Dividend Yield: 1.32%
- 3-Month Average Daily Volume: 43,389
- Assets Under Management: $691.5 million
- Inception Date: June 12, 2000
- Issuer: iShares
IYK tracks the Dow Jones U.S. Consumer Goods Index, which measures the performance of the consumer goods sector of the U.S. equity market. The ETF provides exposure to U.S. companies that offer a broad range of consumer goods, such as food, automobiles, and household items. The fund's 97 holdings are primarily large-cap stocks. Companies that make products such as food, beverage, and tobacco receive the largest allocation, followed by companies that make automobiles and related components. The fund follows a blended strategy, investing in a mix of value and growth stocks. Its top three holdings include Tesla Inc. (TSLA), an electric vehicle and clean energy company; Procter & Gamble Co. (PG), a provider of consumer packaged goods; and Coca-Cola Co. (KO), a beverage company that offers soft drinks, juices, enhanced waters, and more.
- Performance over 1-Year: 55.4%
- Expense Ratio: 0.60%
- Annual Dividend Yield: 0.70%
- 3-Month Average Daily Volume: 5,331
- Assets Under Management: $111.2 million
- Inception Date: Oct. 12, 2006
- Issuer: Invesco
PSL tracks the Dorsey Wright Consumer Staples Technical Leaders Index, which gauges the performance of companies showing strong momentum as determined by their relative strength characteristics. The ETF is a multi-cap fund that follows a blended strategy, investing in a mix of growth and value stocks in the U.S. consumer staples sector. It is comprised of 44 holdings and provides exposure to companies that provide food products, retail staples, personal products, beverages, and diversified consumer services. The fund's top three holdings include class A shares of Coty Inc. (COTY), a provider of branded beauty products; Monster Beverage Corp. (MNST), a provider of energy drink beverages and concentrates; and McCormick & Co. Inc. (MKC), a provider of spices, seasoning mixes, condiments, and other flavorful products.
- Performance over 1-Year: 46.2%
- Expense Ratio: 0.59%
- Annual Dividend Yield: 1.59%
- 3-Month Average Daily Volume: 188,553
- Assets Under Management: $1.7 billion
- Inception Date: July 25, 2000
- Issuer: iShares
IEV tracks the S&P Europe 350 Index, which measures the performance of European equities. The ETF provides international diversification by offering broad exposure to companies operating in a range of European countries, including the U.K., France, Switzerland, Germany, the Netherlands, and others. The large-cap fund is comprised of 365 holdings. Financials receive the highest weighting in the fund, followed by industrials, and healthcare. It follows a blended strategy of investing in both growth and value stocks. The fund's top three holdings include Nestle S.A. (NESN:SWX), a Switzerland-based multinational food and beverage company; ASML Holding NV (ASML:AMS), a Netherlands-based manufacturer of semiconductor equipment; and Roche Holding Ltd. (ROG:SWX), a Switzerland-based multinational healthcare company offering pharmaceuticals and diagnostics.
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