Better Consumer Staples ETF: Vanguard's VDC vs. First Trust's FTXG

Core Viewpoint - The Vanguard Consumer Staples ETF (VDC) is more cost-effective and offers broader sector coverage compared to the First Trust Nasdaq Food & Beverage ETF (FTXG), which has higher expenses and focuses specifically on food and beverage companies [1][2]. Cost and Size Comparison - VDC has an expense ratio of 0.09%, while FTXG charges 0.60% - The one-year return for VDC is 12.06%, compared to FTXG's 9.78% - VDC offers a dividend yield of 2.10%, whereas FTXG provides a higher yield of 2.75% - VDC has assets under management (AUM) of $9.05 billion, significantly larger than FTXG's $17.89 million [3][4]. Performance and Risk Comparison - Over the past five years, VDC experienced a maximum drawdown of 16.55%, while FTXG had a higher drawdown of 21.71% - An investment of $1,000 in VDC would have grown to $1,385 over five years, compared to $925 for FTXG [5]. Fund Composition - FTXG focuses on the food and beverage sector, holding 31 stocks with 91% in consumer defensive, 7% in basic materials, and 2% in industrials; top holdings include PepsiCo, Archer-Daniels-Midland, and Mondelez International [6]. - VDC tracks a broader consumer staples basket with 103 holdings, 98% in consumer defensive and 2% in consumer cyclical; top stocks include Walmart, Costco, and Procter & Gamble [7]. Implications for Investors - Both VDC and FTXG provide exposure to the consumer staples sector, but the choice depends on whether investors prefer FTXG's focus on food and beverage or VDC's broader approach [8]. - For those without existing holdings in the consumer staples industry or looking to expand, VDC is recommended over FTXG for its advantages [9].