“Thanks to our implicit desire to meet basic needs and feed addictions, consumers will continue to flock to stores to fill up on staples like toilet paper, cigarettes and other necessities, whether we are in the midst of market turmoil or economic prosperity,” Don Dion Reports From The Street.

Dion continues saying that, “ETF investors looking for a strong defensive play on some of the largest companies that profit from our predictable buying habits should look no further than the various consumer staples ETFs available. Today, investors can choose from a number of large, liquid offerings from some of the largest providers of exchange traded funds. Funds such as the Consumer Staples Select Sector SPDR Fund (XLP) and the Vanguard Consumer Staples ETF (VDC) provide investors with ample exposure to the companies that produce the products we can’t live without. My pick for playing this industry right now is the iShares Dow Jones U.S. Consumer Goods Index Fund (IYK).”

“IYK is neither the cheapest nor the most liquid of the consumer staples ETFs available. However, I believe that the fund’s underlying holdings provide investors with the best play on this defensive industry with an added twist that primes it for great upside. Additionally, with a 2.4% yield, IYK provides investors with a nice flow of income no matter which way the fund and market moves. Due to IYK’s unique take on the consumer staples industry, investors holding this fund are exposed not only to the large, stable companies that will hold up well in any market climate, but also the recovering auto industry that still has some gas left in its tank. By playing the likes of Ford and Johnson Controls alongside Proctor & Gamble and Coca-Cola, investors holding IYK have the best of both worlds: stability and growth,” Dion Writes.

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Here are some details on the 3 ETFs including some of the top companies within the ETFs:

The investment (XLP) includes companies from the following industries: food and drug retailing, beverages, food products, tobacco, household products and personal products. The fund will normally invest at least 95% of its total assets in common stocks that comprise the relevant Select Sector Index. The Funds also have adopted a policy that requires each Fund to provide shareholders with at least 60 days notice prior to any significant material change in a Fund’s policy. It is nondiversified.

TOP 10 HOLDINGS ( 65.59% OF TOTAL ASSETS)

Company Symbol % Assets ALTRIA GROUP INC (MO) 3.69 COCA COLA CO THE (KO) 7.02 COLGATE PALMOLIVE (CL) 4.04 CVS CAREMARK CP (CVS) 4.62 KRAFT FOODS INC (KFT) 3.65 PEPSICO INC (PEP) 4.33 PHILIP MORRIS INTL (PM) 8.33 PROCTER GAMBLE CO (PG) 16.07 WAL MART STORES (WMT) 10.35 WALGREEN CO (WAG) 3.49

The investment (VDC) seeks to track the performance of a benchmark index that measures the investment return of consumer staples stocks. The fund employs a passive management investment approach designed to track the performance of the MSCI U.S. Investable Market Consumer Staples index. This index consists of stocks of large, medium-size, and small U.S. companies within the consumer staples sector. It includes manufacturers and distributors of food, beverages, and tobacco, as well as producers of nondurable household goods and personal products. The fund is non diversified.

TOP 10 HOLDINGS ( 62.48% OF TOTAL ASSETS)

Company Symbol % Assets ALTRIA GROUP INC (MO) 3.22 COCA COLA CO THE (KO) 8.46 COLGATE PALMOLIVE (CL) 3.38 CVS CAREMARK CP (CVS) 4.49 KRAFT FOODS INC (KFT) 3.38 PEPSICO INC (PEP) 6.7 PHILIP MORRIS INTL (PM) 7.23 PROCTER GAMBLE CO (PG) 13.52 WAL MART STORES (WMT) 8.85 WALGREEN CO (WAG) 3.25

The investment (IYK) seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the Dow Jones U.S. Consumer Goods Index. The fund generally invests at least 90% assets in securities of the underlying index and depositary receipts representing securities of the underlying index. It may invest the remainder of the assets in securities not included in the underlying index but which BGFA believes will help the fund track the underlying index, and in futures contracts, options on futures contracts, options and swaps as well as cash and cash equivalents. The fund is nondiversified.

TOP 10 HOLDINGS ( 60.27% OF TOTAL ASSETS)

Company Symbol % Assets ALTRIA GROUP INC (MO) 3.45 COCA COLA CO THE (KO) 10.36 COLGATE PALMOLIVE (CL) 3.5 FORD MOTOR CO (F) 2.69 KIMBERLY CLARK CP (KMB) 2.26 KRAFT FOODS INC (KFT) 3.12 MONSANTO COMPANY (MON) 3.78 PEPSICO INC (PEP) 8.12 PHILIP MORRIS INTL (PM) 7.83 PROCTER GAMBLE CO (PG) 15.16

 

 

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