Although this is something of a cliche, it's arguably safe to say the dawn of 2022 brings us one of the most uncertain investing climates in a very long time. With debates about wind-ups of ultra-loose monetary policy, the ongoing COVID-19 pandemic (complete with new variants like Omicron), and plenty of elections scheduled, 2022 is certainly living up to be an interesting year, to say the least. So how does one prepare for such uncertainty? Looking to the consumer staples sector could be one path worth exploring.
Think about the products that remain unequivocally in demand during these uncertain times. Food, drinks, household essentials, vices, and hygiene supplies all spring to mind. Well, that's exactly what the iShares Global Consumer Staples ETF (ASX: IXI) focuses on.
This exchange-traded fund (ETF) exclusively invests in consumer staples companies. They are the kinds of businesses that specialise in the products just listed. According to the provider iShares, this ETF is exclusively focused on providing "exposure to companies that produce essential products, including food, tobacco, and household items".
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What's in a consumer staples ETF?
You can see this in action by looking at IXI's top holdings. As they stand today, its top five companies are as follows:
- Procter & Gamble Co (NYSE: PG)
- Nestle SA
- Coca-Cola Co (NYSE: KO)
- Walmart Inc (NYSE: WMT)
- PepsiCo Inc (NASDAQ: PEP)
It also holds companies as diverse as L'Oreal SA, British American Tobacco plc, Colgate-Palmolive Company (NYSE: CL), and even our own Woolworths Group Ltd (ASX: WOW).
Overall, almost 54% of IXI's holdings hail from the United States. But the United Kingdom, Europe, Japan, Canada, and Australia are also represented in this ETF.
IXI's natural resilience that comes from these consumer staples companies can arguably be seen in its performance metrics too. The iShares Global Consumer Staples ETF has returned 20.24% over the past 12 months. That's in addition to an average of 13.2% over the past 3 years. Over the past 10, it has given investors an average return of 13.14% per annum. It also pays out a dividend distribution, which comes to a trailing yield of 1.91% over the past 12 months.
So all in all, the iShares Global Consumer Staples ETF could be a worthwhile investment to hold in these uncertain times. Who knows what 2022 will bring us… But we can say with relative certainty that food, drinks, and household essentials will remain a cornerstone of consumer spending around the world.
The iShares Global Consumer Staples ETF charges a management fee of 0.46% per annum.
