The Vanguard Consumer Staples ETF (VDC) was launched on 01/26/2004, and is a passively managed exchange traded fund designed to offer broad exposure to the Consumer Staples - Broad segment of the equity market.
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds 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 9, placing it in bottom 44%.
Index Details
The fund is sponsored by Vanguard. It has amassed assets over $7.31 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
Expense ratios are an important factor in the return of an ETF and in the long term, cheaper funds can significantly outperform their more expensive counterparts, other things remaining 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 2.38%.
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.
This ETF has heaviest allocation in the Consumer Staples sector--about 99.70% of the portfolio.
Looking at individual holdings, Procter & Gamble Co/the (PG) accounts for about 11.48% of total assets, followed by Costco Wholesale Corp (COST) and Walmart Inc (WMT).
The top 10 holdings account for about 57.17% of total assets under management.
Performance and Risk
Year-to-date, the Vanguard Consumer Staples ETF has added roughly 16.07% so far, and is up about 19.84% over the last 12 months (as of 09/25/2024). VDC has traded between $175.13 and $221.32 in this past 52-week period.
The ETF has a beta of 0.61 and standard deviation of 13.28% for the trailing three-year period, making it a medium risk choice in the space. With about 107 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 good 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 $1.41 billion in assets, Consumer Staples Select Sector SPDR ETF has $18.72 billion. IYK has an expense ratio of 0.40% and XLP charges 0.09%.
Bottom Line
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Get it free >>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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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
