When You Play Defense With Consumer Staples, Which ETF Should You Own? Funds From State Street and First Trust Offer a Stark Choice.
Compare portfolio strategies and sector exposures as two leading consumer staples ETFs take different paths to long-term returns.
When You Play Defense With Consumer Staples, Which ETF Should You Own? Funds From State Street and First Trust Offer a Stark Choice.
Overview
The State Street Consumer Staples Select Sector SPDR ETF (NYSEMKT:XLP) provides low-cost exposure to broad U.S. staples, whereas the First Trust Nasdaq Food & Beverage ETF (NASDAQ:FTXG) targets a narrower slice of the industry with a focus on smart-beta selection criteria.
Both the State Street fund and the First Trust fund seek to capture the defensive qualities of the consumer staples sector, which often serves as a portfolio anchor during periods of market turbulence.
Details
However, they go about it very differently. The State Street fund tracks a market-cap-weighted index of S&P 500 staples, while the First Trust fund seeks to track a different index, the Nasdaq U.S. Smart Food & Beverage Index, which uses factors such as volatility and growth to overweight or underweight components.
Source
Originally published at www.fool.com.
