Take a minute to say "thank you" for consumer staples exchange traded funds (ETFs). These special friends tend to be reliable through the good times and bad. That’s because U.S. consumers "need" soda, macaroni and cheese, toothpaste, soap and alcohol.
In general, consumer staples are looked at as a more defensive ETF to protect against tough market times. However, if you’re looking for a consumer staples ETF that gives back a little more, you might want to think on a global level, suggests Gary Gordon for ETF Expert. One example is the iShares S&P Global Consumer Staples (KXI). Currently, KXI is up 12.0% year-to-date.
Although most of the holdings in KXI are U.S.-based, it also has some exposure in Latin America, which is an emerging-market region. As emerging-market countries become more developed, it will increase their need for consumer staples. Eventually, what we consider consumer staples will be theirs as well. If and when these conditions occur, they could impact KXI and other global consumer staple ETFs. Some others to consider with their year-to-date performance include:
- Rydex S&P Equal Weight Consumer Staples ETF (RHS) – up 5.9%
- PowerShares Dynamic Consumer Staples Sector Portfolio (PSL) – up 5.5%
- First Trust Consumer Staples AlphaDEX Fund (FXG) – up 1.1% for the month, having just launched in May
- Consumer Staples Select Sector SPDR (XLP) – up 7.4%
- Vanguard Consumer Staples ETF (VDC) – up 8.3%
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Mr. Lydon serves as an independent trustee of certain mutual funds and ETFs that are managed by Guggenheim Investments; however, any opinions or forecasts expressed herein are solely those of Mr. Lydon and not those of Guggenheim Funds, Guggenheim Investments, Guggenheim Specialized Products, LLC or any of their affiliates. 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.