The Vanguard Consumer Staples (NYSEArca: VDC) is another fund that tracks this sector of the market, at the low price of 0.19%. VDC tracks the MSCI US Investable Market Consumer Staples 25/50 Index and tracks a broader basket of 109 consumer staples stocks. The fund has a total asset base of $1.2 billion. The ETF tracks companies that are direct to consumers and those that are sensitive to consumer spending habits.
The Utilities Select Sector SPDR (NYSEArca: XLU) has posted small losses as we near the end of 2012, but not because of anything more than the upcoming fiscal cliff. The dividend focus of sector ETFs has caused investors to pile out of this area of the market because of the fear of Bush-era tax cuts expiring. In fact, many dividend focused ETFs have been hurt by the headlines of the fiscal cliff. XLU has a 4% dividend yield and has lost 7.9% over the past month. [Why Investors are Selling Utility ETFs Before the Fiscal Cliff]
The iShares Dow Jones US Utilities Sector Fund (NYSEArca: IDU) has a 3.2% yield and has lost about 7.3% over the past month. The 60 stock index is more robust than XLU but generally tracks the same companies that XLU holds as top assets. [Utilities ETFs Can be a Market Tell]
The recent sell-off is most likely the outcome of the uncertainty in stock markets and the unknown. Utilities and consumer staples are sectors that will be stable over the long term and will provide consistent diversification and stability in a portfolio.
Tisha Guerrero contributed to this article.