With growth coming to a crawl in the developed markets, consumer-goods companies are setting their eyes on the relatively untapped market share of the emerging markets. One may invest in consumer-staples exchange traded funds to gain exposure to a basket of well-known consumer-product names.
The 2010 Interbrand ranking named Coca-Cola (NYSE: KO) as the most widely renowned international name brand, writes Matt Koppenheffer for The Motley Fool. Coca-Cola’s international operations reported volume and operating income growth of 12% and 20%, respectively, for the third quarter. While at home, Coke increased volume by 2%.
Other large consumer-goods names like Procter & Gamble (NYSE: PG) and Colgate-Palmolive (NYSE: CL) are taken on greater competition from private-label products from Target (NYSE: TGT) and Kroger (NYSE: KR).
Consumer goods are expected to experience slower growth in North American and European markets, but these companies will likely continue to focus on the quickly expanding emerging markets, which should help offset the slow growth in the more developed countries.
- iShares Dow Jones U.S. Consumer Goods Index Fund (NYSEArca: IYK). KO is 9.38%. CL is 3.41%. PG is 15.19%.
- iShares S&P Global Consumer Staples Sector Index Fund (NYSEArca: KXI). KO is 5.84%. PG is 8.08%.
- PowerShares Dynamic Consumer Staples (NYSEArca: PSL). KO is 2.5%. CL is 2.59%. PG is 2.52%.
- SPDR Consumer Staples Select Sector Fund (NYSEArca: XLP). KO is 6.45%. CL is 4.01%. PG is 16.44%.
- Vanguard Consumer Staples ETF (NYSEArca: VDC). KO is 8.06%. CL is 3.4%. PG is 13.6%.
- Emerging Global Shares Emerging Markets Consumer (NYSEArca: ECON). Mexico (18.7%), Brazil (15.5%), South Africa (13.8%), India (11.3%) and China (8.8%). Autos and beverages each account for about 13%, food is 12%.
Max Chen contributed to this article.