The Consumer Staples Select Sector SPDR Fund (XLP) is the most popular ETF for this market segment, with over $14 billion in assets. This is not financial advice, investing advice, or tax advice. When stock prices are falling, XLP will typically fall less than the broader market indices, and much less than riskier areas of the market. The above 3 ETFs only target Consumer Staples stocks in the United States. Copyright © But when U.S. consumers need to leave their homes, they are buying their everyday consumer products, which can benefit XLP’s top holdings. Sign up to receive email updates when a new post is published. In the short term, no one knows where the market is headed. You may have noticed that most of this article consists of opinion, or logical projection, as it were, about the market and economy in 2020. The Vanguard Consumer Staples ETF (VDC) is next in popularity, with over $6 billion in assets. Such stocks include, Walmart (NYSE:WMT), Costco (NASDAQ:COST), and Procter & Gamble (NYSE:PG). – things that people need on an everyday basis. Copyright © 2020 InvestorPlace Media, LLC. Specifically, consumers will spend less on discretionary goods and services, such as luxury items, entertainment and technology, but continue buying the non-discretionary necessity items, such as food, beverages, drugs and basic household products. This allows me to continue producing high-quality, ad-free content on this site and pays for the occasional cup of coffee. 1125 N. Charles St, Baltimore, MD 21201. I am not a financial advisor, portfolio manager, or accountant. All rights reserved. This results in much more exposure to small- and mid-caps than the above ETFs. Demand for some staples even increases during recessions. In summary, XLP is less volatile than the broad market indices, such as the S&P 500. Investors have no precedent to draw upon. But it’s a reasonable bet that the U.S. is already in a recession, which will last months, not weeks. 1 position on the InvestorPlace best ETFs for 2020 list by as much as 600 basis points. Here are the best Consumer Defensive funds. # 1. in Consumer Defensive. Consequently, revenues for these companies are relatively steady even during market turmoil. As of this writing, Kent Thune did not personally hold a position in any of the aforementioned securities. See the full list here. Kent Thune’s choice for the contest is the Consumer Staples Select Sector SPDR Fund (NYSEARCA:XLP). 1125 N. Charles St, Baltimore, MD 21201. In the height of selling during mid-March, consumer staples was a leading sector and XLP was in the No. Here are more recent signs of a late-phase environment or slowing economy: In summary, the U.S. economy is moderately healthy but the expansion is clearly showing signs of a slowdown. The fund seeks to track the S&P Consumer Staples Select Sector Index, composed of Consumer Staples stocks in the S&P 500. The fund seeks to track the MSCI USA IMI Consumer Staples Index. 1125 N. Charles St, Baltimore, MD 21201. Below are the 5 best Consumer Staples ETFs: The Consumer Staples Select Sector SPDR Fund (XLP) is the most popular ETF for this market segment, with over $14 billion in assets. Your email address will not be published. VDC – Vanguard Consumer Staples ETF The case for the Consumer Staples Select Sector Fund (NYSEARCA:XLP) in 2020 can be summarized simply: Consumers will continue spending this year, but they will begin to be more selective in which goods and services they purchase. The Consumer Staples sector tracks companies whose primary businesses are based around food and beverages, hygiene products, household items, etc. Think Procter & Gamble, Coca-Cola, General Mills, Johnson & Johnson, etc. But opting out of some of these cookies may affect your browsing experience. Last Updated: October 30, 2020 No Comments – 3 min. Nov. 24, 2020, XRP Price Predictions: How Experts See Ripple Moving From New Highs Through 2025, Nio Stock Is Starting To Lose Power After An Electrified Rally, CIIC Stock: Why Shares Are Surging Ahead of the Arrival SPAC Merger, 7 Growth Stocks to Buy as We Head Into 2021. Past performance does not guarantee future returns. The chart below presents three different ETFs in the industry, Consumer Staples Select SPDR Fund (NYSEMKT:XLP), Vanguard Consumer Staples ETF (NYSEMKT:VDC) and iShares U.S. Consumer … Interested in more Lazy Portfolios? Under no circumstances does this information represent a recommendation to buy or sell securities. Out of these, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. Investment products discussed (ETFs, mutual funds, etc.) IYK, ECON, and XLP are the best consumer staples ETFs for Q4 2020 iShares U.S. Consumer Goods ETF (IYK) Columbia Emerging Markets Consumer ETF (ECON) Consumer Staples Select Sector SPDR Fund (XLP) Disclosure: Some of the links on this page are referral links. When information and data are short or absent, an investor must use their intuition, which comes from a combination of experience and educated guesses. We also use third-party cookies that help us analyze and understand how you use this website. Consumer Staples are an attractive sector for those seeking steady growth, healthy dividends, and low volatility. If you prefer to access Consumer Staples globally, the iShares Global Consumer Staples ETF (KXI) is roughly 50% exposed to the United States, with the other 50% in foreign holdings around the world. ETF issuers who have ETFs with exposure to Consumer Staples are ranked on certain investment-related metrics, including estimated revenue, 3-month fund flows, 3-month return, AUM, average ETF expenses and average dividend yields. Market value: $36.1 billion. The Invesco S&P 500 Equal Weight Consumer Staples ETF (RHS) is equal-weighted, so each company in the fund gets equal exposure. As a result, this sector is typically more insulated than others during market downturns. Best ETFs for 2020: Consumer Staples Select Sector Fund (XLP) Is a Winner, InvestorPlace.com’s Best ETFs for 2020 contest, 6 Big-Cap Energy Stocks to Avoid Heading Into 2021, Louis Navellier and the InvestorPlace Research Staff, Earnings Show Why Nvidia Stock Remains a Must-Own, Matt McCall and the InvestorPlace Research Staff, What Did the Stock Market Do Today? I'm not a big fan of social media, but you can find me on LinkedIn and Reddit. You also have the option to opt-out of these cookies. What Is a Leveraged ETF and How Do They Work? In this environment, investors are wise to focus on dividend-paying stocks. As an added bonus, this ETF is also cheaper, with an expense ratio of 0.10%. Under no circumstances does this information represent a recommendation to buy or sell securities. This broader diversification comes at a cost; this ETF has an expense ratio of 0.46%. 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