Gold’s Future Does Not Look Shiny: SPDR Gold Trust (ETF) (GLD), Utilities SPDR (ETF) (XLU), Consumer Staples Select Sect. SPDR (ETF) (XLP)

50% The Utilities SPDR (ETF) (NYSEARCA:XLU). The fund is a cheap (its gross expense ratio is 0.18%) and diversified (it holds 33 different names in it) way to play the US Utilities sector. The Utilities Select Sector SPDR trades at 1 times NAV and has a 2013 15.5 P/E ratio. Besides, it pays a 3.81% cash dividend yield. Its beta (volatility) against the S&P500 is only 49%.

50% The Consumer Staples Select Sect. SPDR (ETF) (NYSEARCA:XLP). The fund is a cheap (its gross expense ratio is 0.18%) and diversified (it holds 44 different names in it) way to play the US consumer staples sector. The Consumer Staples Select Sector SPDR trades at 1 times NAV and has a 2013 16.7 P/E ratio. Besides, it pays a 2.77% cash dividend yield. Its beta (volatility) against the S&P500 is 63%.

The proposed portfolio above will give you low volatility (weighted average beta is 56%) a growing 3.29% cash dividend yield and the inflation protection you are looking for. But, above all, this portfolio can be valued through its expected cash flow stream making it a non speculative investment. You will own cash cows from Procter & Gamble to Coca-Cola and PG&E. That’s what I would call safe Value!

The article Gold’s Future Does Not Look Shiny originally appeared on Fool.com and is written by Federico Zaldua.

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