Consumer staples exchange traded funds have offered investors a safe place to park their capital amid the market volatility over the past year. S&P Capital IQ recently weighted the three largest consumer staples ETFs “Overweight” in a recent note.
“Within the Risk Considerations category, each of the three ETFs received a relatively favorable appraisal from the S&P Quality Rank metric, which suggests a relatively good earnings and dividend track record for companies of which these ETFs owned shares,” S&P said in the note. [Why Consumer Staples ETFs Are Holding Their Own]
The consumer staples sector will remain a defensive play amid the market uncertainty for the remainder of 2012. The sector has a high dividend yield and good dividend growth potential, reports Tom Graves, S&P Capital analyst.
The three funds highlighted by the recent research note include:
- Consumer Staples Select Sector SPDR (NYSEArca: XLP) up 8.65%; This is the largest and least expensive ETF. The top 10 holdings account for 70% of the fund. [5 ETFs Hitting Highs in 2012]
- iShares Dow Jones US Consumer Goods (NYSEArca: IYK) up 7.45%; The top 10 holdings account for 59%of the fund.
- Vanguard Consumer Staples ETF (NYSEArca:VDC) up 10%; The top 10 stocks account for about 66% of the fund.[Quality and Defense with Consumer Staples ETFs]
Tisha Guerrero contributed to this article.