Should You Invest in the Vanguard Consumer Staples ETF (VDC)?
Designed to provide broad exposure to the Consumer Staples - Broad segment of the equity market, the Vanguard Consumer Staples ETF (VDC) is a passively managed exchange traded fund launched on 01/26/2004.
While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.
Sector ETFs are also funds of convenience, offering many ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. Consumer Staples - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 11, placing it in bottom 31%.
The fund is sponsored by Vanguard. It has amassed assets over $7.67 billion, making it one of the largest ETFs attempting to match the performance of the Consumer Staples - Broad segment of the equity market. VDC seeks to match the performance of the MSCI US Investable Market Consumer Staples 25/50 Index before fees and expenses.
The MSCI US Investable Market Consumer Staples 25/50 Index measures the investment return of stocks in the consumer staples sector.
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Annual operating expenses for this ETF are 0.09%, making it one of the cheaper products in the space.
It has a 12-month trailing dividend yield of 2.33%.
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Consumer Staples sector--about 99.90% of the portfolio.
Looking at individual holdings, Costco Wholesale Corp (COST) accounts for about 12.67% of total assets, followed by Walmart Inc (WMT) and Procter & Gamble Co/the (PG).
The top 10 holdings account for about 63.55% of total assets under management.
The ETF return is roughly 6.87% and was up about 11.69% so far this year and in the past one year (as of 06/03/2025), respectively. VDC has traded between $201.77 and $226.16 during this last 52-week period.
The ETF has a beta of 0.61 and standard deviation of 12.72% for the trailing three-year period, making it a medium risk choice in the space. With about 105 holdings, it effectively diversifies company-specific risk.
Vanguard Consumer Staples ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, VDC is a good option for those seeking exposure to the Consumer Staples ETFs area of the market. Investors might also want to consider some other ETF options in the space.
IShares U.S. Consumer Staples ETF (IYK) tracks Dow Jones U.S. Consumer Goods Index and the Consumer Staples Select Sector SPDR ETF (XLP) tracks Consumer Staples Select Sector Index. IShares U.S. Consumer Staples ETF has $1.52 billion in assets, Consumer Staples Select Sector SPDR ETF has $16.45 billion. IYK has an expense ratio of 0.40% and XLP charges 0.08%.
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Vanguard Consumer Staples ETF (VDC): ETF Research Reports
Procter & Gamble Company (The) (PG) : Free Stock Analysis Report
Walmart Inc. (WMT) : Free Stock Analysis Report
Costco Wholesale Corporation (COST) : Free Stock Analysis Report
Consumer Staples Select Sector SPDR ETF (XLP): ETF Research Reports
iShares U.S. Consumer Staples ETF (IYK): ETF Research Reports
This article originally published on Zacks Investment Research (zacks.com).
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