Business & Finance / Sunday, April/07/2024 / 6

ETFs to Target the Consumer Goods and Staples Markets

Consumer goods are a staple in our economy. They satisfy needs, drive sales and revenue, and are a strong indicator of the economy’s overall health. And of course, there is a whole financial sector focusing on investing in consumer products.

One of the easiest ways to gain exposure to consumer goods and staples market from an investing perspective is to consider consumer ETFs. Pre-packaged mini-portfolios consisting of holdings aimed at the consumer sector.

There is a pretty decent selection of consumer exchange traded funds as well as some inverse and leveraged options, too.

And not only do you gave instant access to the consumer sector with these ETFs, but there are other advantages as well such as the tax benefits they have over other investments and overall trading costs and fee savings.

Not that ETFs don’t have their disadvantages as well, but there are some strong reasons why it makes sense to utilize a consumer ETF instead of mutual funds, stocks, or indexes. But each investing situation is unique, so you have to evaluate on a case by case basis.

But if you do want to consider consumer ETFs to either diversify your portfolio, take a position in the consumer goods market or hedge some consumer staples risk (or any other reason), below is a list of ETFs to research. I’ve broken them out by category – basic, foreign, inverse and leveraged, and specialty consumer funds.

Consumer Goods and Staples ETFs

FCL - Focus Morningstar Consumer Cyclical Index ETF

FXG - First Trust Consumer Staples Alpha DEX ETF
GGEM – EG Shares Consumer Goods GEMS ETF
IYC - iShares Dow Jones US Consumer Services ETF
IYK - iShares Dow Jones US Consumer Goods ETF
PSL – Power Shares Dynamic Consumer Staples ETF
RHS - Rydex S&P Equal Weight Consumer Staples ETF
VCR - Vanguard Consumer Discretionary ETF
VDC - Vanguard Consumer Staples ETF
VGEM – EG Shares Consumer Services GEMS ETF

Foreign Consumer ETFs

AXSL - iShares MSCI ACWI ex US Consumer Staples Sector Index ETF
IPD - SPDR S&P International Consumer Discretionary Sector ETF
IPS - SPDR S&P International Consumer Staple Sector ETF
RXI - iShares S&P Global Consumer Discretionary ETF

Inverse and Leveraged Consumer ETFs

SCC – Ultra Short Consumer Services Pro Shares ETF
SZK – Ultra Short Consumer Goods Pro Shares ETF
UCC - Ultra Consumer Services Pro Shares ETF
UGE - Ultra Consumer Goods Pro Shares ETF

Specialty Consumer ETFs

FCD - Focus Morningstar Consumer Defensive Index ETF

As more consumer ETFs are launched (or even de-listed), I will update this list, so be sure to check back often for adjustments.

Also, no investment is risk free, so know the impact each exchange trade fund (or note) can have on your portfolio or strategy. Research each find individually and watch how they react to different market conditions. If you have any questions or concerns, do not hesitate to consult your broker, your financial advisor, or a certified investing professional.

Be especially careful with leveraged and inverse ETFs. As they are more for an advanced trading strategy and structured very differently from normal ETFs. So thorough research on those funds is required. Here are some great places to start.

Once you feel you’ve conducted your due diligence and understand your risks and rewards, then you are ready to trade. Good luck with your investing strategy, which now includes consumer ETFs.