Best Vanguard Funds: Vanguard Consumer Staples ETF (VDC)
Some products we just cannot seem to live without — and that spells opportunity for the Vanguard Consumer Staples ETF (VDC).
This $1.9 billion fund is chock full of megacap companies that cater to our most basic needs as a consumer. These firms are defensive in nature, yet they have real profits and earnings that are in style even when stocks do well in general.
This fund was up an impressive 28% in 2013 and held its own in the 2008 meltdown, losing 17% in a year that cost the S&P 500 37% of its value. Over the long haul, the VDC has returned 9.6% annually over the past 10 years, which places it in the top 1% of its Morningstar consumer defensive category. When it comes to reducing risk, VDC is a solid holding that can work in just about any market condition.
The portfolio contains a total of 111 stocks. About 20% of the VDC is committed to household products, while 18% of the holdings are in soft drink names. From distillers of spirits to tobacco, there is a product in this fund for pretty much every taste and habit. Current top holdings include Procter & Gamble (PG), Coca-Cola (KO), Walmart (WMT), Phillip Morris International (PM) and PepsiCo (PEP).
Fund expenses run a downright cheap 0.14%, or $14 for every $10,000 invested, and VDC also yields 2.6% in dividends.