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.
Investor-friendly, sector ETFs provide many options 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 15th, placing it at the bottom 6%.
The fund is sponsored by Vanguard. It has amassed assets over $ 7.09 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.
When considering an ETF’s total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long run if all other factors remain equal.
Annual operating expenses for this ETF are 0.10%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 1.98%.
Sector Exposure and Top Holdings
ETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund’s holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
Looking at individual holdings, Procter & Gamble Co. (PG) accounts for about 13.87% of total assets, followed by Coca-Cola Co. (KO) and Pepsico Inc. (PEP).
The top 10 holdings account for about 63.19% of total assets under management.
Performance and Risk
The ETF return is roughly 3.03% so far this year and was up about 15.13% in the last one year (as of 04/26/2022). In that past 52-week period, it has traded between $ 179.09 and $ 208.31.
The ETF has a beta of 0.66 and a standard deviation of 18.73% for the trailing three-year period, making it a medium risk choice in the space. With about 99 holdings, it effectively diversifies company-specific risk.
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 reasonable 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 US Consumer Staples ETF (IYK) tracks Dow Jones US Consumer Goods Index and the Consumer Staples Select Sector SPDR ETF (XLP) tracks Consumer Staples Select Sector Index. IShares US Consumer Staples ETF has $ 1.13 billion in assets, Consumer Staples Select Sector SPDR ETF has $ 16.99 billion. IYK has an expense ratio of 0.41% and XLP charges 0.10%.
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
CocaCola Company The (KO): Free Stock Analysis Report
Procter & Gamble Company The (PG): Free Stock Analysis Report
PepsiCo, Inc. (PEP): Free Stock Analysis Report
Consumer Staples Select Sector SPDR ETF (XLP): ETF Research Reports
iShares US Consumer Staples ETF (IYK): ETF Research Reports
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.