Consumer Staples ETFs: Sector-Wide Defense or a Food-and-Beverage Tilt? VDC vs. PBJ

Core Viewpoint - The Vanguard Consumer Staples ETF (VDC) is more cost-effective and offers broader sector coverage compared to the Invesco Food & Beverage ETF (PBJ), which has a more focused investment strategy in food and beverage stocks but comes with higher fees [1][2]. Cost and Size Comparison - VDC has an expense ratio of 0.09%, significantly lower than PBJ's 0.61% - VDC's one-year return is 11.5%, while PBJ's is 8.04% - VDC offers a dividend yield of 2.1%, compared to PBJ's 1.7% - VDC has a beta of 0.64, indicating lower volatility compared to PBJ's beta of 0.72 - VDC's assets under management (AUM) stand at $9.05 billion, whereas PBJ has $99.12 million [3][4]. Performance and Risk Comparison - Over the past five years, VDC experienced a maximum drawdown of -16.55%, while PBJ had a drawdown of -15.84% - An investment of $1,000 in VDC would have grown to $1,375 over five years, compared to $1,293 for PBJ [5]. Portfolio Composition - PBJ consists of 31 U.S. companies in the food and beverage sector, focusing on capital appreciation through factors like price momentum and quality - Major holdings in PBJ include Corteva Inc, Sysco Corp, and Monster Beverage Corp, with 89% of its portfolio in consumer defensive stocks [6]. - VDC tracks a broader consumer staples sector with 103 holdings, including major companies like Walmart Inc, Costco Wholesale Corp, and Procter & Gamble Co, maintaining a strong focus on consumer defensive stocks [7]. Investment Implications - Consumer staples investing aims for reliability, making the differences in fund design significant - VDC provides broad, low-cost exposure to the staples sector, benefiting from steady demand for household goods - PBJ's targeted approach to food and beverage companies makes it more sensitive to consumer spending trends and valuation changes, but it incurs higher fees [8][9][10].