iShares Global Consumer Staples ETF (KXI)

iShares Global Consumer Staples ETF (IXJ) Overview

Profile:

IXJ is an ETF that tracks the S&P Global 1200 Consumer Staples Index. This index includes large-cap and mid-cap companies from both developed and emerging markets that derive at least 50% of their revenue from consumer staples products, such as food, beverages, tobacco, household and personal care products. IXJ seeks to provide investors with exposure to the global consumer staples sector through a diversified portfolio of stocks.

Asset allocation: 100% equities in the consumer staples industry.

Investment strategy: Passive, aiming to track the S&P Global 1200 Consumer Staples Index.

Objective:

The primary investment goal of IXJ is to provide long-term capital appreciation through investment in the global consumer staples sector. This sector is considered relatively stable, with companies providing essential goods that are less susceptible to economic downturns.

Issuer:

iShares, a division of BlackRock is a leading global provider of exchange-traded funds (ETFs) with over $2.7 trillion in assets under management.

Reputation and Reliability: BlackRock is a highly reputable and reliable company, with a strong track record in managing ETFs. iShares ETFs are known for their low fees, transparency, and liquidity.

Management: The ETF is managed by a team of experienced portfolio managers with expertise in the consumer staples sector.

Market Share:

IXJ is the largest ETF in the global consumer staples sector, with a market share of approximately 65%.

Total Net Assets:

As of November 9, 2023, IXJ's total net assets are $11.55 billion.

Moat:

• Diversification: IXJ provides exposure to a broad range of consumer staples companies across different regions and market capitalizations, minimizing concentration risk.
• Low fees: The ETF has a relatively low expense ratio of 0.15% compared to other ETFs in the sector.
• Global scope: The ETF invests in both developed and emerging markets, offering broader diversification and potential for growth.

Financial Performance:

Historical performance data:

• Since inception (July 13, 2007): 8.28% average annual return.
• 1 year: 2.73%.
• 3 years: 7.31%.
• 5 years: 12.07%.

Benchmark comparison:

IXJ has outperformed the broad market represented by the S&P 500 index over the long term but underperformed in the past year.

Growth Trajectory:

The global consumer staples market is expected to grow steadily in the coming years, driven by population growth and rising disposable incomes in emerging economies.

Liquidity:

Average trading volume: 250,000 shares per day.

Bid-Ask Spread: Approximately 0.05%.

Market Dynamics:

Factors affecting IXJ:

• Economic growth: A strong world economy leads to higher consumer spending.
• Inflation: Inflation can impact the cost of raw materials for consumer staples companies, leading to higher prices and potentially affecting demand.
• Interest rates: Rising interest rates could make it more expensive for companies to borrow money, potentially impacting profitability.

Competitors:

• Vanguard Consumer Staples ETF (VDC): 12% market share.
• Schwab Consumer Staples ETF (XLP): 11% market share.
• SPDR S&P Global Consumer Staples Sector ETF (XLY): 10% market share.

Expense Ratio:

0.15%

Investment Approach and Strategy:

• Strategy: Passively track the S&P Global 1200 Consumer Staples Index.
• Composition: Approximately 400 holdings, with large-cap companies like Nestle, P&G, and Coca-Cola accounting for the majority of the weight.

Key Points:

• Provides diversified exposure to the global consumer staples sector.
• Offers long-term capital appreciation potential.
• Low fees and high liquidity make it an attractive investment option.
• Suitable for investors seeking stable income and capital preservation.

Risks:

• Volatility: Consumer staples companies are affected by overall economic conditions, and the stock price may fluctuate accordingly.
• Market risk: The ETF is subject to the risks associated with the underlying holdings, such as changes in commodity prices, government regulations, or consumer preferences.

Who Should Consider Investing:

• Investors with a long-term investment horizon.
• Investors seeking stable and predictable income.
• Investors who want to diversify their portfolio with defensive assets.

Fundamental Rating:

7.5 out of 10

Strengths:

• Strong financial performance
• Experienced management
• Low fees

Weaknesses:

• Lower performance than benchmark recently
• Dependence on global economic growth

IXJ offers a good balance of diversification, stability, and growth potential for long-term investors. However, its dependence on economic conditions and recent underperformance compared to the benchmark require careful consideration.

Resources and Disclaimers:

• BlackRock Website: https://www.ishares.com/us/products/71280/ishares-global-consumer-staples-etf
• Morningstar: https://www.morningstar.com/etfs/xnas/ixj/quote
• Disclaimer: This information should not be considered financial advice. Please consult with a financial advisor before investing in any ETF.