Consumer Staples

Why invest in Consumer Staples

Consumer staples sector is comprised of all companies that are involved in producing goods and services that are essential or necessities for our living. Common examples are food/beverage/other essential household goods. They are stable, reliable companies that can offer steady stream of dividends. They do not experience wide fluctuations with the economy and hence are also known as defensive companies. Historically the correlation between this sector and overall economy is low , making it a good candidate for diversification. There is not much differentiation in the products/service offered.

GICS breaks sector into manufacturers and distributors of food, beverages and tobacco and producers of non-durable household goods and personal products. It also includes food & drug retailing companies as well as hypermarkets and consumer super centers

Key indicators to consider before investing

Top 5 ETF’s by Market Capitalization

Name of the Fund Ticker Symbol /Total AUM* Year of Inception Expense Ratio
 Consumer Staples Select Sector SPDR  XLP  12/16/1998 0.14%
 Vanguard Consumer Staples  VDC  01/26/2000  0.10%

First Trust Consumer Staple Alpha

FXG

 05/08/2007 0.61%
 Rydex S&P Equal Weight Consumer Staple RHS  11/01/2006  0.40%
 iShares Dow Jones US Consumer Goods IYK  06/12/2006  0.44%

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