Consumer staples ETF

When we talk about consumer staples it is not precisely clear what is meant by this. The market sector in consumer goods is a very broad sector.

Many companies more or less are active in the consumer goods business although their distinctive markets do differ widely. So I thought it would be a good idea to dig into this world consumer staples ETF a little deeper.

Within this consumer staples ETF manufacturers of food and beverages are predominant. The Tobacco industry also plays a major role. Another market segment is occupied by the large worldwide retailers such as Wal-Mart Stores, so it covers many distinctive market sectors.

That being said, this is not the way to look at this world consumer staples ETF. The consumer and its spending power are the detrimental factors here. In effect, it is not important what consumer buy, it is whether they buy at all.

The major market drivers here are the world economy, buying power and last but not least the absolute number of consumers. As underdeveloped countries are on the rise the total number of potential consumers is rising too.

The large companies that are included in this world consumer staples ETF always are the first movers to expand their activities in these upcoming markets. Years ago they acted when Eastern Europe was opening up, at this moment they still are sowing their seeds in some Asian countries and eventually the African continent will be swooped up by these large consumer goods companies (and some already are firmly in place there).  

Looking at the opportunities of this consumer staples ETF the growing number of “new” consumers and consumers with an increasing purchase power will help this ETF to prosper for years to come.

Just looking at the enormous potential China and India have to offer make a strong case for this ETF. In times of temporary setbacks this consumer staples ETF offers great entry points. Within this world consumer staples ETF you will find a number of well-known brands.

Lyxor MSCI World Consumer Staples TR UCITS ETF

This ETF is all about consumer goods. It tracks the MSCI global consumer goods index. This MSCI World Consumer Staples index is a reinvestment index (just like the German DAX for that matter).

The largest share is taken up by Nestle with a weighing of 7%. Proctor and Gamble comes in second with a 6% share. Coca Cola and Pepsico are weighed evenly with a 5% share each.

Looking at the geographical spread the US dominates this world consumer staples ETF with a 50% share. The UK is good for a 15% share. Then Switzerland (!) and Japan come in with a share of 7% each. Belgium and France are good for 3%.

The TR in this ETF stand for Total Return. This consumer staples ETF does not pay out dividends so the dividends paid out by the underlying stocks is added to the price of this ETF. 

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