Emerging Markets Boost Consumer Staples ETFs
October 22nd at 3:00pm by Tom Lydon
With growth coming to a crawl in the developed markets, consumer-goods companies are setting their eyes on the relatively untapped market share of the emerging markets. One may invest in consumer-staples exchange traded funds (ETFs) to gain exposure to a basket of well-known consumer-product names.
The 2010 Interbrand ranking named Coca-Cola (NYSE: KO) as the most widely renowned international name brand, writes Matt Koppenheffer for The Motley Fool. Coca-Cola’s international operations reported volume and operating income growth of 12% and 20%, respectively, for the third quarter. While at home, Coke increased volume by 2%.
Other large consumer-goods names like Procter & Gamble (NYSE: PG) and Colgate-Palmolive (NYSE: CL) are taken on greater competition from private-label products from Target (NYSE: TGT) and Kroger (NYSE: KR).
Consumer goods are expected to experience slower growth in North American and European markets, but these companies will likely continue to focus on the quickly expanding emerging markets, which should help offset the slow growth in the more developed countries.
For more information on consumer goods, visit our consumer staples category.
- iShares Dow Jones U.S. Consumer Goods Index Fund (NYSEArca: IYK). KO is 9.38%. CL is 3.41%. PG is 15.19%.
- iShares S&P Global Consumer Staples Sector Index Fund (NYSEArca: KXI). KO is 5.84%. PG is 8.08%.
- PowerShares Dynamic Consumer Staples (NYSEArca: PSL). KO is 2.5%. CL is 2.59%. PG is 2.52%.
- SPDR Consumer Staples Select Sector Fund (NYSEArca: XLP). KO is 6.45%. CL is 4.01%. PG is 16.44%.
- Vanguard Consumer Staples ETF (NYSEArca: VDC). KO is 8.06%. CL is 3.4%. PG is 13.6%.
- Emerging Global Shares Emerging Markets Consumer (NYSEArca: ECON). Mexico (18.7%), Brazil (15.5%), South Africa (13.8%), India (11.3%) and China (8.8%). Autos and beverages each account for about 13%, food is 12%.
Max Chen contributed to this article.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.