Skip to Content
ETF Specialist

Play Defense With This ETF

A low-cost way to access 39 consumer defensive firms found in the S&P 500.

Mentioned: , , , , , , , , ,

U.S. consumer defensive stocks have rallied during the past year. Driving the U.S. consumer staples sector's outperformance have been several factors, chief among them interest rates that have gone lower. As many investors have stretched for yield in an era of ultralow interest rates, they have looked for bondlike substitutes in equity sectors like consumer staples and utilities. And with rates falling further, it's likely that some investors looking for income have sought solace in the consumer staples sector. That's not the entire story, however. Also driving the sector's success have been a generally strong U.S. consumer and higher valuations from takeover speculation that has swirled in the space.

Looking ahead, rising interest rates are a risk for the sector, along with continued strength in the dollar (which can be bad for some U.S. staples firms' overseas businesses) and weaker global consumer spending. Potential catalysts for consumer staples firms are innovation and product extensions, prudent acquisitions, and growth in emerging and developing markets.

Robert Goldsborough does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.

Transparency is how we protect the integrity of our work and keep empowering investors to achieve their goals and dreams. And we have unwavering standards for how we keep that integrity intact, from our research and data to our policies on content and your personal data.

We’d like to share more about how we work and what drives our day-to-day business.

We sell different types of products and services to both investment professionals and individual investors. These products and services are usually sold through license agreements or subscriptions. Our investment management business generates asset-based fees, which are calculated as a percentage of assets under management. We also sell both admissions and sponsorship packages for our investment conferences and advertising on our websites and newsletters.

How we use your information depends on the product and service that you use and your relationship with us. We may use it to:

  • Verify your identity, personalize the content you receive, or create and administer your account.
  • Provide specific products and services to you, such as portfolio management or data aggregation.
  • Develop and improve features of our offerings.
  • Gear advertisements and other marketing efforts towards your interests.

To learn more about how we handle and protect your data, visit our privacy center.

Maintaining independence and editorial freedom is essential to our mission of empowering investor success. We provide a platform for our authors to report on investments fairly, accurately, and from the investor’s point of view. We also respect individual opinions––they represent the unvarnished thinking of our people and exacting analysis of our research processes. Our authors can publish views that we may or may not agree with, but they show their work, distinguish facts from opinions, and make sure their analysis is clear and in no way misleading or deceptive.

To further protect the integrity of our editorial content, we keep a strict separation between our sales teams and authors to remove any pressure or influence on our analyses and research.

Read our editorial policy to learn more about our process.