Fundsmith Equity Fund Overview - Fundsmith Equity Fund's T Class Accumulation shares returned 0.8% in 2025, underperforming the MSCI World Index which returned 12.8% [1] - Since inception, the fund has outperformed the index by 1.7% per annum [1] - Underperformance in 2025 attributed to index concentration, growth of assets in Index Funds, and dollar weakness [1] Church & Dwight Co., Inc. Analysis - Church & Dwight Co., Inc. (NYSE:CHD) stock closed at $86.66 on January 12, 2026, with a one-month return of 2.50% and a 52-week loss of 17.69% [2] - The company has a market capitalization of $21.11 billion [2] - Fundsmith noted that Church & Dwight is affected by mixed consumer fortunes in the US, which is impacting demand for its discount products [3] - In Q3 2025, Church & Dwight reported a revenue increase of 5% and organic sales growth of 3.4% [3] - The stock is not among the 30 most popular stocks among hedge funds, with 44 hedge fund portfolios holding it at the end of Q3 2025, up from 39 in the previous quarter [3] - Fundsmith believes certain AI stocks present greater upside potential compared to Church & Dwight [3]

Group 1: Market Outlook - Morgan Stanley's Chief Investment Officer Mike Wilson presents a bullish outlook for the U.S. equity market, predicting high teens earnings growth and focusing on the consumer goods sector [1][5] - Wilson describes the market's path as "crystal clear," driven by a stabilizing Federal Reserve and legislative support that will rejuvenate the consumer sector [2][6] Group 2: Consumer Goods Sector - The consumer goods sector is identified as a top conviction pick for the year, expected to rebound after a "rolling recession" [2] - Wilson highlights favorable factors such as falling interest rates and fiscal stimulus that will unlock pent-up demand in the consumer goods sector [2][3] Group 3: Earnings and Federal Reserve Support - Wilson argues that the earnings picture is strengthening, forecasting earnings growth in the "high teens" as the market rally expands beyond the tech sector [5] - A key factor in this optimism is the Federal Reserve's shift in policy, including asset purchases to stabilize funding markets, which Wilson views as a significant support for investors [6] Group 4: Market Performance - The Dow Jones U.S. Consumer Goods Index has shown a performance of 9.62% over the last six months, while year-to-date performance is at -1.40% [4] - The iShares US Consumer Staples ETF has a one-year performance of 5.25%, indicating some resilience in the consumer staples segment [4] Group 5: General Market Trends - Year-to-date, the S&P 500 index is up 0.63%, and the Dow Jones is up 2.41%, while the Nasdaq 100 is down by 0.07% [9] - The SPDR S&P 500 ETF Trust and Invesco QQQ Trust ETF closed lower recently, with SPY down 0.01% and QQQ down 0.60% [10]

Core Insights - Investors in the consumer staples sector face a choice between broader coverage with the Vanguard Consumer Staples ETF (VDC) and a focused strategy with the Invesco S&P 500 Equal Weight Consumer Staples ETF (RSPS) [1] Cost and Size Comparison - VDC has a significantly lower expense ratio of 0.09% compared to RSPS's 0.40%, making it more cost-effective for long-term investors [3][4] - VDC has a much larger asset under management (AUM) of $8.6 billion versus RSPS's $236.3 million, indicating greater investor confidence and liquidity [3] Performance and Risk Analysis - Over the past year, VDC has outperformed RSPS with a return of -0.4% compared to RSPS's -2.6% [3] - VDC has a lower maximum drawdown of -16.55% over five years compared to RSPS's -18.64%, indicating better risk management [5] Portfolio Composition - VDC holds 103 stocks and is heavily weighted towards major consumer defensive companies like Walmart (14.53%), Costco (12.00%), and Procter & Gamble (10.09%), providing broader diversification [6] - RSPS, with only 36 holdings, employs an equal-weighted strategy, giving each stock the same influence, which can lead to less diversification and a focus on smaller companies [7][9] Investment Implications - VDC is suitable for investors seeking low costs and willing to have larger companies influence returns, while RSPS appeals to those wanting a pure representation of the consumer staples sector [11]

Core Insights - The article compares two ETFs targeting the U.S. consumer staples sector: Fidelity MSCI Consumer Staples Index ETF (FSTA) and State Street Consumer Staples Select Sector SPDR ETF (XLP), highlighting their differences in portfolio structure, yield, and liquidity [4][5][10]. Group 1: Portfolio Structure - FSTA holds 104 stocks with a sector tilt of 98% towards consumer defensive, providing broader diversification compared to XLP, which has only 36 holdings [1][8]. - XLP's top holdings include Walmart, Costco Wholesale, and The Procter & Gamble Co., which constitute a significant portion of its assets, indicating a concentrated investment approach [2][5]. - FSTA's top five holdings represent a larger percentage of its total portfolio compared to XLP, making it somewhat top-heavy [9]. Group 2: Yield and Expense Ratio - Both ETFs charge a low expense ratio of 0.08%, but XLP offers a higher yield of 2.7% compared to FSTA's 2.3%, appealing to income-focused investors [3][5]. Group 3: Liquidity and Size - XLP has $14.9 billion in assets under management (AUM), making it larger and more liquid than FSTA, which may benefit investors looking for ease in executing large trades [2][8]. - The greater liquidity of XLP is a significant advantage over FSTA, despite both ETFs covering the same defensive sector [5][10].

Core Investment Strategy - The primary focus for retirees should be on generating reliable cash flow through dividends rather than on fluctuating portfolio values, which can lead to panic during market downturns [3][4][5] - An income-first approach is becoming increasingly popular among retirees, allowing them to maintain a stable financial lifestyle and cover living expenses without frequent principal withdrawals [4][5] Benefits of Dividend Income - Dividend income helps retirees avoid the pitfalls of traditional withdrawal strategies, which can force them to sell assets at lower prices during market declines [7][9] - This strategy allows retirees to keep their principal intact while still receiving cash distributions to cover expenses, thus positioning their investments for recovery when markets stabilize [9] Recommended Dividend Stocks and Funds - Procter & Gamble (NYSE:PG) is highlighted for its stability, with an annual dividend payment of approximately $4.23 and a history of 69 years of dividend growth [11] - Enterprise Product Partners (NYSE:EPD) offers a high yield of 6.81% with an annual dividend payout of $2.18, benefiting from its energy infrastructure operations [12] - Rexford Industrial Realty (NYSE:REXR) combines income and capital appreciation with a dividend yield of 4.18% and a strong growth record [13] - The Vanguard International High Dividend Yield ETF (NASDAQ:VYMI) provides international exposure with a yield of 3.75%, capturing income from global markets [14] Cash as a Safety Net - Maintaining liquid cash reserves is essential for retirees, serving as a safety net for unexpected expenses while allowing investments to grow or recover during market fluctuations [15]

Core Viewpoint - The Schwab U.S. Dividend Equity ETF (SCHD) is highlighted as an ideal investment for income-focused investors, offering a combination of high yield and potential capital gains through a diversified portfolio of stocks [2][4]. Group 1: ETF Overview - The Schwab U.S. Dividend Equity ETF has been established for 14 years and is managed by Charles Schwab, boasting over $71 billion in net assets, making it one of the largest high-yield ETFs [4]. - The ETF has a low expense ratio of 0.06%, ensuring that investors are not overpaying for its benefits [5]. - It pays quarterly dividends with a 30-day SEC yield of 3.8%, which is close to the 10-year Treasury rate of 4.2%, providing a competitive passive income option [6]. Group 2: Investment Strategy - The ETF targets large-cap, high-yield stocks, with approximately 90% of its investments in companies with market capitalizations exceeding $15 billion, appealing to investors seeking diversification [8]. - Over half of the ETF's investments are concentrated in three sectors: energy, consumer staples, and healthcare, which are known for prioritizing dividend growth [9]. Group 3: Sector and Holdings - Key energy holdings include major companies like Chevron, ConocoPhillips, and EOG Resources, which help manage risk across the oil and gas value chain [10]. - The top healthcare holdings, such as Merck and Amgen, offer high yields and favorable valuations, while leading consumer staples like PepsiCo and Coca-Cola have consistently raised dividends for over 50 years, earning the title of Dividend Kings [11]. Group 4: Performance and Value - Since its inception in October 2011, the Schwab U.S. Dividend Equity ETF has more than tripled in value, demonstrating its potential for capital gains alongside dividend income [13]. - The ETF is positioned as a foundational holding for value-focused portfolios or as a means to balance portfolios that have become overly concentrated in growth stocks [12].

Core Insights - The article compares two consumer staples ETFs, the State Street Consumer Staples Select Sector SPDR ETF (XLP) and the Invesco S&P 500 Equal Weight Consumer Staples ETF (RSPS), highlighting their distinct approaches to sector exposure and investment strategies [1][2]. Expense Ratios and Portfolio Structure - XLP has a significantly lower expense ratio of 0.08% compared to RSPS's 0.40%, making it more cost-effective for investors [3][10]. - XLP manages $15.5 billion in assets under management (AUM), while RSPS has $236.2 million, indicating XLP's larger scale and potential liquidity advantages [3][11]. - XLP's portfolio is market-cap-weighted, leading to heavy exposure to large companies like Walmart and Procter & Gamble, with its top three holdings comprising nearly 30% of the fund [5][7]. - RSPS employs an equal-weighting strategy, providing more balanced exposure across its 37 holdings, with top positions representing less than 4% of assets each [6][7]. Performance and Risk Comparison - Over the past year, RSPS has returned -5.05%, while XLP has returned -3.19%, indicating better performance for XLP in this timeframe [3]. - The maximum drawdown over five years for RSPS is -18.61%, compared to -16.32% for XLP, suggesting that XLP has been slightly less volatile [4]. - The growth of $1,000 invested over five years would yield $992 for RSPS and $1,180 for XLP, further illustrating XLP's superior performance [4]. Investment Implications - XLP's concentrated approach can lead to higher returns when top holdings perform well, but it also poses risks if those stocks underperform [8][9]. - RSPS's diversified strategy may protect against volatility but could dilute the potential gains from high-performing stocks [9]. - Investors should consider the trade-offs between cost, performance, and risk when choosing between these two ETFs [10].

Core Viewpoint - Dividend growth investing is expected to gain significant traction in 2026, providing a stable income source and long-term wealth building opportunities for investors, particularly in a shifting market environment [1][2]. Group 1: Market Conditions - The market is transitioning from a tech-driven focus to one that favors companies with stable dividends, as investor sentiment shifts towards lower-risk investments [2][5]. - Lower corporate debt costs due to decreasing interest rates will enable companies to increase their dividends, making dividend growth more appealing to investors [4]. Group 2: Company Positioning - Companies that have improved their balance sheets and cash flow over the past three years are well-positioned to raise dividends in 2026, thus attracting income-focused investors [3][6]. - Notable companies with strong dividend growth histories include Procter & Gamble (PG) with a 2.91% yield and 69 consecutive years of dividend increases, Johnson & Johnson (JNJ) with a 2.58% yield and 63 years of growth, and PepsiCo (PEP) with a 3.93% yield and 53 years of increases [7].

Core Insights - The article compares two consumer staples ETFs: State Street Consumer Staples Select Sector SPDR ETF (XLP) and iShares US Consumer Staples ETF (IYK), highlighting their differences in cost, portfolio composition, and sector exposure [1][2]. Cost and Size - XLP has a lower expense ratio of 0.08% compared to IYK's 0.38%, making it more cost-effective for investors [3][4]. - XLP has a larger Assets Under Management (AUM) of $15.5 billion, while IYK has an AUM of $1.3 billion [3]. - The one-year return for XLP is -5.4%, while IYK's is -3.9%, indicating IYK has outperformed XLP in the short term [3]. Performance and Risk Comparison - Over five years, XLP has a maximum drawdown of -17.8%, while IYK's is -16.3%, suggesting IYK has slightly better risk management [5]. - The growth of $1,000 invested over five years is $1,167 for XLP and $1,239 for IYK, indicating IYK has provided better returns [5]. Portfolio Composition - IYK includes 12% in healthcare and 2% in basic materials, with a total of 55 holdings, while XLP is strictly focused on consumer staples with 100% allocation and 37 holdings [6][7]. - Top holdings for IYK include Procter & Gamble, Coca-Cola, and Philip Morris International, while XLP's largest positions are Walmart, Costco, and Procter & Gamble [6][7]. Investment Considerations - The decision between XLP and IYK may hinge on the trade-off between fees and performance, with XLP being more affordable but IYK potentially offering broader exposure [8][9]. - Investors may prefer IYK if they seek exposure to healthcare and basic materials, despite its higher fees [10][11].

Core Insights - The article compares two consumer staples ETFs, the State Street Consumer Staples Select Sector SPDR ETF (XLP) and the Invesco S&P 500 Equal Weight Consumer Staples ETF (RSPS), highlighting their differing approaches to sector exposure and investment strategies [1][2]. Cost and Size - XLP has a significantly lower expense ratio of 0.08% compared to RSPS's 0.40% [3][4]. - As of November 28, 2025, XLP has a one-year return of -4.5%, while RSPS has a return of -6.6% [3]. - XLP has a much larger Assets Under Management (AUM) of $15.5 billion compared to RSPS's $237.2 million [3]. Performance and Risk Comparison - Over the past five years, RSPS experienced a maximum drawdown of -18.61%, while XLP had a drawdown of -16.32% [5]. - An investment of $1,000 in XLP would have grown to $1,186 over five years, while the same investment in RSPS would have decreased to $990 [5]. Portfolio Composition - XLP holds 38 stocks and is heavily weighted towards large companies like Walmart, Costco, and Procter & Gamble, which can dominate its performance [6]. - RSPS also consists of 38 stocks but employs an equal-weighting strategy, giving each holding similar allocation, featuring companies like Monster Beverage, Bunge Global, and Dollar Tree [7]. Market Context - Consumer staples are generally considered defensive stocks, but many have struggled due to inflation and tariff concerns [8][9]. - Both ETFs provide diversification options for investors concerned about concentration in tech stocks within the S&P 500 [9]. - XLP's focus on larger companies has contributed to its better performance compared to RSPS, which may appeal to those interested in small- and medium-cap stocks [10][11].