Consumer Staples Select Sect. SPDR (ETF) (XLP)

Defensive pick

jim van meerten

Line up for the soup kitchen, ladies and gentleman!

Consumer Staples Select Sect. SPDR (ETF) (XLP) seeks to offer investors exposure to the relatively stable sector of consumer staples.

Consumer staples are pretty much necessities needed on a daily basis. Be it in a bloom or gloom.

It's top 3 holdings currently are Procter & Gamble Co. , Wal-Mart Stores Inc. and Philip Morris International Inc.

Both 2007 and 2008 produced dividends of around 60cents +/- .

Reflecting it's relatively stable nature, the annualized ten years performance of this ETF is at 0.91%

You should not see big dips or climbs.

Risk adverse investors may consider this as a relatively low risk long term holding while enjoying some dividends at the same time.

Geeky81
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My Finance Blog : www.thegeekknows.com

consumer staples are needed no matter what the economy does

we all have to use the products this eft offers. forget the economy all these componets are strong

Time to stock up on staples, particularly those near their 52 week lows. I know consumers are 'lagging' spenders, but these prices are insane.

will outperform over the next year, but after the economy regains normal growth patterns it will lag in the recovery phase.

10000

ditto TDHR's "Cokes & Smokes" (I get it now...)

Part of a "Cokes & Smokes" defensive position.

Consumer staples are poised for a rebound in the next few months.

the recent decrease in oil prices combined with historic low interest rates will boost US consumer disposable income.

see details in http://professor1x2.blogspot.com

This one has been floating steadily around 28 US$. With the market going downward, zero price increase means beating the market :))

TDRH pick ? what can I say ?

expect to outperform xly in recession

Consumer staples EFT is a defensive play for a soft economy. Consumers keep buying staples like soap and toilet paper in bad times and good. The market will pay a premium for these stocks when times are tough.

consumer is hurting

The Consumer Staples Select Sector SPDR Fund (XLP) is an index fund that seeks to replicate the total return of the Consumer Staples Select Sector of the Standard and Poor's 500 Composite Stock Index. The fund manages approximately $1.61 billion worth of net assets with an expense ratio of 0.24%. The fund makes investment in industries dealing with food and drug retailing, beverages, food products, tobacco, household products and personal products.

This ETF provides exposure to the shares of market leading purveyors of everyday stuff at a low expenses ratio compared to that of its peers. The top 3 holdings Procter and Gamble, Altria Group and Wal-Mart accounting for about 42% of the corpus is a real cause of concern making it vulnerable to individual stock blowups. However there is a drawback wherein the fund concentrates more on the large cap companies of the United States that meets Standard and Poor’s profitability criteria ultimately eliminating the international behemoths with the likes of Unilever and Diageo

Analyzing the past returns, it shows that the fund has performed satisfactorily well in the last three years. Endorsing the same it had posted a 14.49% return in 2006. There is a general feeling that the stock is currently under valued and worth more owing to the funds top holding in dominant franchisee that are worth more than its current price. The defensive nature of the consumer staple sector in a slowing economy makes it very attractive. Reflecting the same it has low measures of volatility, which offers it attractive valuation with good future growth prospects. Witnessing the past trends of low cost, tax efficiency and diversification the fund looks all set to beat the market.