ETF Monkey Focus: Consumer Staples ETFs

Mar. 23, 2017 6:55 PM ETCL, DIS, FSTA, GIS, MAR, NKE, PG, VDC, XLP4 Comments


  • Every investor desirous of developing an ETF-based portfolio does well to start by selecting a few core holdings.
  • To this core, however, investors may wish to add specific exposure to certain sectors of the market. Those with a defensive bent may do well to consider Consumer Staples.
  • In this article, I will evaluate three competitors in the Consumer Staples sector that meet the ETF Monkey Focus criteria.

Based on that first bullet point in the summary, in previous articles in the ETF Monkey Focus series, I have featured U.S. Total Market ETFs, U.S. Broad-Market Bond ETFs and International Total Market ETFs, as well as sub-categories of some of these, such as S&P 500 ETFs and Emerging Market ETFs.

Here is a handy index to all ETFs covered to-date, including a link to the first article in the series, which highlights the criteria I used for ETFs to be included as well as common features that I hope will make these articles very useful tools for an investor as they begin their research. This article brings the total to 30 ETFs I have covered in this series.

With their core intact, however, investors may wish to add exposure to specific sectors of the market, based on their personal needs and risk profile. I plan to focus the next few articles in the series on ETFs that allow investors to do this.

What Are Consumer Staples?

Generally, stocks specifically involving the consumer are categorized as either Consumer Staples (sometimes referred to as Consumer Non-Cyclicals) or Consumer Discretionary (sometimes referred to as Consumer Cyclicals).

In brief, Consumer Staples is the term given to products, and the companies which produce these, that are considered essential, such as food, beverages, household items, and tobacco. These are the sorts of items that people need to function each and every day and therefore are generally unable to cut out of their budget even in bad times. Examples of companies in this sector are Procter & Gamble (PG), Colgate-Palmolive (CL) and General Mills (GIS). This also explains the term non-cyclicals, as these products are required regardless of the ups and downs of economic cycles.

In contrast, Consumer Discretionary is the term given to products, and the companies

This article was written by

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I am a recently-retired individual investor and have managed my own investments for over 35 years. My professional background is in the finance area. I believe that the benefits of investing, and the market, should be understandable and available to everyone, including those with little or no financial background. My hope is to explain concepts simply, taking much of the mystery and fear out of the process.  To keep up with my very latest, please subscribe to my Substack newsletter and Twitter feed. In addition to my personal writing, I am a contributing author for Hoya Capital Income Builder

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure: I am not a registered investment advisor or broker/dealer. Readers are advised that the material contained herein should be used solely for informational purposes, and to consult with their personal tax or financial advisors as to its applicability to their circumstances. Investing involves risk, including the loss of principal.

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