Investing in consumer staples can be a great way to protect your portfolio at a time when investors are rapidly shedding overpriced growth stocks. Consumer staples are things that are essential, such as food products and household goods. Even amid rising prices or a recession, they are products that consumers simply can’t do without and aren’t likely to stop buying.
An exchange-traded fund (ETF) that focuses on this segment of the market is the Invesco S&P 500 Equal Weight Consumer Staples ETF (NYSE Arca: RHS). Its greatest exposure is to food products, which account for more than 41% of its holdings, followed by beverages at 19%, and household products at just under 16%. Many of the stocks in the fund are big names that consumers will undoubtedly be familiar with, including PepsiCo (NASDAQ:PEP), General Mills (NYSE:GIS), and Kellogg (NYSE:K). Each of those stocks make up more than 3% of the ETF’s total weight. There are a total of 33 holdings in the fund and a rebalancing is done quarterly.
In addition to providing some stability, the fund is averaging a 30-day yield of 2% right now. Its total returns (including dividends) thus far in 2022 are around 6%, well above the S&P 500’s negative returns of 10%.
As investors move towards safety amid market turmoil, this is the type of ETF that could perform well and deliver steady and modest returns. Parking your money into this fund while the market is volatile can be a great move to make today.
