Has the iShares Consumer Staples ETF protected investors’ portfolios in 2022?

When it comes to consumer staples shares and the role they can play in one’s ASX share portfolio, one word probably comes to mind: defensive. When we hear investors discuss consumer staples shares, it normally involves the idea that these companies can protect an investor’s portfolio from volatility and capital loss.

That’s because consumer staples are goods and services that we all need, rather than want. They include food, drinks, household essentials, and vices like alcohol and tobacco.

But, like all assumptions in the world of investing, this might not always be the case. So let’s see if this reputation still holds water after what has been an especially tough year so far for investors in 2022 by checking out the iShares Global Consumer Staples ETF (ASX: IXI).

This exchange-traded fund (ETF) is the only one on the ASX that solely holds shares in the consumer staples sector. But not just ASX consumer staples shares though. IXI holds a basket of underlying companies that hail from the United States, the United Kingdom, Switzerland, Japan and France, amongst others.

But Australia is also included, with IXI holding ASX shares like Woolworths Group Ltd (ASX: WOW), Coles Group Ltd (ASX: COL) and Endeavour Group Ltd (ASX: EDV).

But even though most of IXI’s holdings are outside the ASX, you might still be very familiar with some of its top companies. These include Coca-Cola Company, Nestle, PepsiCo, Philip Morris International, Walmart and Unilever.

Has the Consumer Staples ETF protected investors’ portfolios in 2022?

So let’s look at how the iShares Consumer Staples ETF has held up in 2022 so far. So 2022 has been a very rough year for ASX shares. As it currently stands, the S&P/ASX 200 Index (ASX: XJO) remains down by a painful 11.1% in 2022 thus far.

It’s even worse over in the United States. The S&P 500 Index (INDEXSP: .INX) remains down by around 20% year to date.

So how has the IXI ETF fared? Well, over 2022 thus far, the IXI unit price has lost just 3.81%, falling from $88.72 a unit to the $85.34 the ETF closed at yesterday.

Not only that, but investors have also received two dividend distribution payments over 2022 thus far. These amount to $1.73 in distributions per unit. That translates into a trailing yield of just over 2%, bringing this ETF’s 2022 losses even lower

So IXI may have had a disappointing performance over 2022 thus far. But it has still outperformed the ASX 200 by more than 7%, and the S&P 500 by far more than that.

So it seems that in this case, the reputation of consumer staples shares as defensive portfolio protections against market losses and volatility remains intact.

The post Has the iShares Consumer Staples ETF protected investors’ portfolios in 2022? appeared first on The Motley Fool Australia.

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Motley Fool contributor Sebastian Bowen has positions in Coca-Cola, PepsiCo Inc., Philip Morris International, and Walmart Inc. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Philip Morris International and Unilever and has recommended the following options: long January 2024 $47.50 calls on Coca-Cola. The Motley Fool Australia has positions in and has recommended COLESGROUP DEF SET and iShares Global Consumer Staples ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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