5 Best Consumer Staples ETFs

In this article, we discuss the 5 best consumer staples ETFs to invest in. If you want to go through our detailed introduction to the consumer staples industry alongside some more ETFs, go directly to the 10 Best Consumer Staples ETFs.

5. Invesco Dynamic Food & Beverage ETF (NYSE:PBJ)

5-Year Performance as of August 14: 33.97%

The Invesco Dynamic Food & Beverage ETF (NYSE:PBJ) is based on the Dynamic Food & Beverage Intellidex℠ Index. The primary objective of the Index is to achieve capital appreciation through a comprehensive assessment of companies using diverse investment merit factors. These factors encompass price momentum, earnings momentum, quality, management action, and value. The Index consists of securities from 30 US-based food and beverage companies that are primarily involved in the production, sale, or distribution of food and beverage products, agricultural goods, and items related to innovative food technology development.

The Kroger Co. (NYSE:KR), an Ohio-based retail company that is primarily focused on the sale of groceries and related products, is a significant holding of Invesco Dynamic Food & Beverage ETF (NYSE:PBJ). On June 15, the company released its earnings report for the first quarter of 2023. During this quarter, it experienced a 1.3% increase in revenue compared to the same period last year, reaching a total of $45.1 billion. Year-to-date, the company’s operating cash flow expanded to $2.8 billion, displaying growth from the previous year’s figure of $1.1 billion.

4. Consumer Staples Select Sector SPDR Fund (NYSE:XLP)

5-Year Performance as of August 14: 35.28%

The Consumer Staples Select Sector SPDR Fund (NYSE:XLP) aims to replicate the Consumer Staples Select Sector Index’s performance, which consists of companies within the consumer staples sector of the S&P 500 Index. The Consumer Staples Select Sector Index includes companies from the following industries: consumer staples distribution & retail; household products; food products; beverages; tobacco; and personal care products. As of March 2023, the fund managed over $18.14 billion in assets under management and a 30 Day SEC Yield of 2.50%.

PepsiCo, Inc. (NASDAQ:PEP) is a prominent stock holding in the Consumer Staples Select Sector SPDR Fund (NYSE:XLP)’s portfolio. Based in New York, PepsiCo, Inc. (NASDAQ:PEP) is a food company primarily engaged in the production, marketing, and distribution of an extensive array of food and beverage products. At the end of Q2 2023, 68 hedge funds in Insider Monkey’s database reported having stakes in PepsiCo, Inc. (NASDAQ:PEP). These stakes have a consolidated value of over $3.5 billion.

3. Fidelity MSCI Consumer Staples Index ETF (NYSE:FSTA)

5-Year Performance as of August 14: 36.83%

The Fidelity MSCI Consumer Staples Index ETF (NYSE:FSTA) mirrors the MSCI USA IMI Consumer Staples Index’s performance. This index encompasses stocks from the consumer staples sector of the U.S. equity market, ranging from large to small capitalization. Similar to other mutual funds and ETFs offered by Fidelity, FSTA is recognized for its expense ratios that are below the industry average. As of August 14, the fund maintained an expense ratio of 0.084%, overseeing net assets amounting to $1.24 billion. Additionally, the fund presents a dividend yield of 2.29%.

The Coca-Cola Company (NYSE:KO) is one of the largest positions in Fidelity MSCI Consumer Staples Index ETF (NYSE:FSTA)’s portfolio. Founded in 1892, The Coca-Cola Company (NYSE:KO) stands as a prominent American multinational corporation celebrated for its creation of the iconic Coca-Cola beverage. This corporation holds a global leadership position within the beverage industry, engaging in the production, sales, and marketing of a wide spectrum of non-alcoholic beverage concentrates, syrups, and even certain alcoholic beverages.

2. Vanguard Consumer Staples Fund (NYSE:VDC)

5-Year Performance as of August 14: 37.3%

The Vanguard Consumer Staples Fund (NYSE:VDC)’s objective is to mirror the investment performance of the MSCI US Investable Market Consumer Staples 25/50 Index, which serves as a benchmark for U.S. consumer staples stocks across large, mid, and small capitalizations. This index categorizes companies within the consumer staples sector based on the Global Industry Classification Standard (GICS). Notably, this sector comprises businesses that exhibit lower sensitivity to economic cycles. It encompasses food, beverage, and tobacco manufacturers and distributors, nondurable household goods and personal products producers, as well as food and drug retailing companies, alongside consumer staples merchandise retail.

Costco Wholesale Corporation (NASDAQ:COST) is a prominent holding in the Vanguard Consumer Staples Fund (NYSE:VDC). Headquartered in Washington, Costco Wholesale Corporation (NASDAQ:COST) is a retail enterprise specializing in the operation of membership-only warehouse clubs. Renowned for its provision of a diverse selection of products at reduced prices exclusively to its members, the company is a prominent player in the retail sector. Although it missed analyst Q2 EPS estimates, the stock gained a decent 23% year-to-date.

1. iShares US Consumer Staples ETF (NYSE:IYK)

5-Year Performance as of August 14: 65.08%

The iShares US Consumer Staples ETF (NYSE:IYK) is an ETF designed to provide investors exposure to the consumer staples sector within the U.S. equity market. Managed by iShares, a division of BlackRock, the fund aims to track the performance of the Dow Jones U.S. Consumer Goods Index.

A notable holding in the iShares US Consumer Staples ETF (NYSE:IYK) portfolio is Philip Morris International Inc. (NYSE:PM), a tobacco corporation that concentrates on the sale of cigarettes and smoke-free alternatives. These alternatives encompass heat-not-burn, vapor, and oral nicotine products. Philip Morris International Inc. (NYSE:PM) disclosed its Q2 non-GAAP EPS as $1.60 on July 20, accompanied by a revenue figure of $9 billion. These results exceeded Wall Street’s projections by $0.12 and $290 million, respectively.

Ariel Investments made the following comment about Philip Morris International Inc (NYSE:PM) in its first-quarter 2023 investor letter:

“Finally, tobacco maker, Philip Morris International Inc. (NYSE:PM) declined in the period on concerns related to supply-chain disruptions resulting from the war in Ukraine, which we view as temporary. We believe the favorable economics and margin expansion associated with market share gains from the IQOS brand and Reduced Risk Products should yield value creation opportunities in the years ahead. Furthermore, at current trading levels, we think the company’s operating leverage, pricing power, and free cash flow profile offer a margin of safety.”

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