News

Designed to provide broad exposure to the Consumer Staples - Broad segment of the equity market, the Vanguard Consumer Staples ETF (VDC) is a passively managed exchange traded fund launched on 01/26/2004.

An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also excellent vehicles for long term investors.

Additionally, sector ETFs offer convenient ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. Consumer Staples - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 14, placing it in bottom 13%.

Index Details

The fund is sponsored by Vanguard. It has amassed assets over $6.66 billion, making it one of the largest ETFs attempting to match the performance of the Consumer Staples - Broad segment of the equity market. VDC seeks to match the performance of the MSCI US Investable Market Consumer Staples 25/50 Index before fees and expenses.

The MSCI US Investable Market Consumer Staples 25/50 Index measures the investment return of stocks in the consumer staples sector.

Costs

Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are the same.

Annual operating expenses for this ETF are 0.10%, making it one of the cheaper products in the space.

It has a 12-month trailing dividend yield of 2.54%.

Sector Exposure and Top Holdings

While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.

This ETF has heaviest allocation in the Consumer Staples sector--about 100% of the portfolio.

Looking at individual holdings, Procter & Gamble Co/the (PG) accounts for about 12.27% of total assets, followed by Costco Wholesale Corp (COST) and Walmart Inc (WMT).

The top 10 holdings account for about 58.91% of total assets under management.

Performance and Risk

Year-to-date, the Vanguard Consumer Staples ETF has gained about 9.05% so far, and it's up approximately 6.15% over the last 12 months (as of 07/25/2024). VDC has traded between $175.13 and $209.07 in this past 52-week period.

The ETF has a beta of 0.60 and standard deviation of 13.26% for the trailing three-year period, making it a medium risk choice in the space. With about 103 holdings, it effectively diversifies company-specific risk.

Alternatives

Vanguard Consumer Staples ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, VDC is a sufficient option for those seeking exposure to the Consumer Staples ETFs area of the market. Investors might also want to consider some other ETF options in the space.

IShares U.S. Consumer Staples ETF (IYK) tracks Dow Jones U.S. Consumer Goods Index and the Consumer Staples Select Sector SPDR ETF (XLP) tracks Consumer Staples Select Sector Index. IShares U.S. Consumer Staples ETF has $1.24 billion in assets, Consumer Staples Select Sector SPDR ETF has $16.27 billion. IYK has an expense ratio of 0.40% and XLP charges 0.09%.

Bottom Line

To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.

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Vanguard Consumer Staples ETF (VDC): ETF Research Reports

Procter & Gamble Company (The) (PG) : Free Stock Analysis Report

Walmart Inc. (WMT) : Free Stock Analysis Report

Costco Wholesale Corporation (COST) : Free Stock Analysis Report

Consumer Staples Select Sector SPDR ETF (XLP): ETF Research Reports

iShares U.S. Consumer Staples ETF (IYK): ETF Research Reports

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Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.