Investing in a top exchange-traded fund (ETF) can be a great way to build up your portfolio’s balance over the years. Regardless of what happens in the short term, a diversified ETF can allow you to benefit from the economy’s long-term growth.
Vanguard has many excellent low-cost and diverse ETFs for investors to choose from. And one of the more attractive ones to buy right now is the Vanguard Consumer Staples ETF (NYSE Arca: VDC), which can do well even in the short term. The passively managed fund focuses on the consumer staples sector, which involves companies which sell direct-to-consumer products which are nondiscretionary. This can make these types of stocks less vulnerable to adverse economic conditions given that they involve businesses which provide consumers with day-to-day essentials that they need.
The top three stocks in the fund are Costco Wholesale (NASDAQ:COST), Walmart (NYSE:WMT), and Procter & Gamble (NYSE:PG). There are around 100 stocks in total in the ETF, giving investors some good diversification. And at an average price-to-earnings multiple of 25, the fund isn’t too expensive, especially when compared to other investments which are trading at even higher valuations.
The Vanguard fund also charges a modest expense ratio of 0.1%, making this a suitable option for the long haul as fees won’t take a big chunk out of your returns. It also pays a dividend which yields around 2.3%. In five years, the fund has risen by 33% and when you include the dividend payments, the total returns for investors rise to more than 50%.
If you’re a risk-averse investor or just don’t want to pay a big premium for stocks, the Vanguard Consumer Staples fund can be a great option to invest in for the long haul.
