Needless to say, the S&P/ASX 200 Index (ASX: XJO) is in the midst of quite a nasty crash. ASX blue-chips and growth shares alike have seen a significant reduction in what the market sees as their value over the past six weeks.
Although we have seen some green shoots appearing this week (the ASX 200 is up 3.60% today), it remains a very bleak time to have capital invested in the markets.
Or course, exchange-traded funds (or ETFs) haven't been exempt from this carnage. Market-tracking ETFs like the iShares Core S&P/ASX 200 ETF (ASX: IOZ) have lost some significant value as they aim to follow 'the entire market'. Whatever the ASX 200 has lost, you can expect the same from an index fund.
However, not all ETFs are created equal. And I think there has been one ASX ETF that has proven its worth during this bear market.
Enter the iShares Global Consumer Staples ETF (ASX: IXI)
This ETF from BlackRock only holds companies that produce goods that can be defined as a 'consumer staple'. These include everyday essentials that most of us can't live without – think food, drinks, household cleaning products, personal hygiene products (including toilet paper). Alcohol and tobacco are also included.
This ETF doesn't invest in just Australian companies either. In fact, only 1.49% of the fund is invested in ASX businesses. The lion's share of this ETF is invested in the US as well as Japan, Switzerland, France, Canada and the UK.
Some of its top stocks are household-name companies like Nestle, Coca-Cola, Walmart, Proctor & Gamble and Costco. Coles Group Ltd (ASX: COL) and Woolworths Group Ltd (ASX: WOW) make the cut from Australia, as well as Treasury Wine Estates Ltd (ASX: TWE).
Why is this ETF a great choice for a bear market?
To put it simply, these companies make things that no one is going to stop buying. In this economic shutdown we are enduring, it can be very difficult to try and analyse how a particular business is going to be affected by the coronavirus.
With most of these companies, however, you won't have to worry too much – we all need to eat, drink, buy household essentials and perhaps enjoy an alcoholic beverage during these tough times. Thus, I would expect little to no impact on most of the companies this ETF holds (and maybe even a boost for some).
Since the ASX 200 last peaked in February, this ETF has only lost around 8% of its value going off today's prices. That compares very favourably with the broader market's losses of around 27%.
Foolish takeaway
I think this ETF is a good choice for these dark times we are in. If you want a stable, conservative investment that also pays a dividend, I think you could do worse than this globally diversified fund.
