Should You Invest in the iShares U.S. Consumer Staples ETF (IYK)?

Looking for broad exposure to the Consumer Staples - Broad segment of the equity market? You should consider the iShares U.S. Consumer Staples ETF (IYK), a passively managed exchange traded fund launched on 06/12/2000.

Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.

Investor-friendly, sector ETFs provide many options to gain low risk and diversified exposure to a broad group of companies in particular sectors. Consumer Staples - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 14, placing it in bottom 13%.

Index Details

The fund is sponsored by Blackrock. It has amassed assets over $1.53 billion, making it one of the larger ETFs attempting to match the performance of the Consumer Staples - Broad segment of the equity market. IYK seeks to match the performance of the Dow Jones U.S. Consumer Goods Index before fees and expenses.

The Russell 1000 Consumer Staples RIC 22.5/45 Capped Index measures the performance of the consumer goods sector of the U.S. equity market.

Costs

Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are the same.

Annual operating expenses for this ETF are 0.40%, making it on par with most peer products in the space.

It has a 12-month trailing dividend yield of 2.41%.

Sector Exposure and Top Holdings

Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.

This ETF has heaviest allocation in the Consumer Staples sector--about 88.30% of the portfolio. Healthcare and Materials round out the top three.

Looking at individual holdings, Procter & Gamble (PG) accounts for about 16.62% of total assets, followed by Coca-Cola (KO) and Philip Morris International Inc (PM).

The top 10 holdings account for about 68.04% of total assets under management.

Performance and Risk

The ETF has added roughly 9.56% and is up about 8.38% so far this year and in the past one year (as of 04/01/2025), respectively. IYK has traded between $63.29 and $72.12 during this last 52-week period.

The ETF has a beta of 0.68 and standard deviation of 12.83% for the trailing three-year period, making it a medium risk choice in the space. With about 59 holdings, it effectively diversifies company-specific risk.

Alternatives

IShares U.S. Consumer Staples ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, IYK is a reasonable option for those seeking exposure to the Consumer Staples ETFs area of the market. Investors might also want to consider some other ETF options in the space.

Vanguard Consumer Staples ETF (VDC) tracks MSCI US Investable Market Consumer Staples 25/50 Index and the Consumer Staples Select Sector SPDR ETF (XLP) tracks Consumer Staples Select Sector Index. Vanguard Consumer Staples ETF has $7.28 billion in assets, Consumer Staples Select Sector SPDR ETF has $16.77 billion. VDC has an expense ratio of 0.09% and XLP charges 0.08%.

Bottom Line

To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.

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This article originally published on Zacks Investment Research (zacks.com).

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