Vanguard Consumer Staples Index Fund ETF Shares (VDC)

ETF Vanguard Consumer Staples Index Fund ETF Shares (VDC)

Profile:

Vanguard Consumer Staples Index Fund ETF Shares (VDC) is an exchange-traded fund (ETF) that tracks the performance of the CRSP US Large Cap Consumer Staples Index. This ETF invests primarily in large-cap U.S. companies in the consumer staples sector, focusing on companies that produce and distribute essential goods such as food, beverages, tobacco, household products, and personal care products. VDC employs a passive management strategy, meaning it seeks to replicate the performance of its underlying index.

Objective:

The primary investment goal of VDC is to provide long-term capital appreciation and income by replicating the performance of the CRSP US Large Cap Consumer Staples Index.

Issuer:

Vanguard Group:

• Reputation and Reliability: Vanguard is a highly reputable and reliable investment firm with over $8 trillion in assets under management. It is known for its low-cost, transparent, and investor-centric approach.

• Management: The ETF is managed by a team of experienced professionals at Vanguard with a proven track record in managing index funds.

Market Share:

VDC is the second-largest consumer staples ETF by assets under management, with a market share of approximately 20%.

Total Net Assets:

As of November 7, 2023, VDC has total net assets of approximately $25 billion.

Moat:

• Low Fees: VDC has a low expense ratio of 0.10%, making it one of the most cost-efficient options in the consumer staples ETF space.

• Diversification: VDC provides investors with broad exposure to the consumer staples sector through its holdings in over 100 companies.

• Liquidity: VDC is a highly liquid ETF with an average daily trading volume of over 1 million shares.

Financial Performance:

VDC has a strong track record of performance, consistently outperforming its benchmark index over the long term.

• 1-Year Return: 12.5%

• 3-Year Return: 14.2%

• 5-Year Return: 11.7%

Growth Trajectory:

The consumer staples sector is expected to experience moderate growth in the coming years, driven by steady demand for essential goods. VDC is well-positioned to benefit from this growth trend.

Liquidity:

• Average Trading Volume: Over 1 million shares per day.

• Bid-Ask Spread: Approximately 0.02%.

Market Dynamics:

• Economic Growth: VDC is sensitive to economic growth as consumer spending tends to increase during periods of economic expansion.

• Inflation: Inflation can impact the profitability of consumer staples companies, leading to increased costs and potentially higher prices for consumers.

• Interest Rates: Rising interest rates can make it more expensive for companies to borrow money, potentially impacting their ability to invest and grow.

Competitors:

• Consumer Staples Select Sector SPDR Fund (XLP) - Market Share: 50%
• iShares U.S. Consumer Staples ETF (IYK) - Market Share: 15%

Expense Ratio:

The expense ratio for VDC is 0.10%.

Investment Approach and Strategy:

• Strategy: Passively track the CRSP US Large Cap Consumer Staples Index.
• Composition: Invests primarily in large-cap U.S. consumer staples companies.

Key Points:

• Low-cost, passively managed ETF
• Diversified exposure to the consumer staples sector
• Strong track record of performance
• High liquidity

Risks:

• Market Risk: VDC is subject to market risks such as fluctuations in the overall stock market and changes in investor sentiment.
• Sector Risk: The ETF is concentrated in the consumer staples sector, making it vulnerable to specific risks impacting the sector, such as changes in consumer preferences or regulatory changes.

Who Should Consider Investing:

VDC is suitable for investors seeking:

• Long-term capital appreciation
• Income generation
• Exposure to the consumer staples sector
• Diversification within their portfolio

Fundamental Rating Based on AI: 8/10

VDC receives a favorable rating due to its strong fundamentals, including low fees, diversification, solid performance, and liquidity.

Resources and Disclaimers:

• Data Sources:

  • Vanguard VDC ETF
  • Morningstar
  • ETF.com

• Disclaimer: This information is for educational purposes only and should not be considered investment advice. Please consult with a qualified financial advisor before making any investment decisions.