Under The Hood: The "Other" International Staples ETF

When it comes to international consumer staples ETFs, the iShares S&P Global Consumer Staples ETF KXI is the big kahuna. KXI, which is nearly five years old, has $351.6 million in assets under management, giving it a dominant position in this niche of the ETF world. Well, as is often the case with ETFs, where there is one, there is another and KXI does in fact have a rival that might be worth a look: The SPDR S&P International Consumer Staples ETF IPS. Just shy of its third birthday, IPS, an unheralded ETF to be sure, has almost $21 million in assets under management with an expense ratio of 0.5%, just a tad higher than 0.48% offered by KXI. Funny thing about these two ETFs is that they go about the business of global consumer staples plays in very different ways. While Nestle NSRGY, the world's largest food company, is the top holding in both funds, KXI focuses more on U.S.-based staples stocks such as Procter & Gamble PG and PepsiCo PEP. On the other hand, IPS actually exposes investors to non-U.S. companies. Think British American Tobacco BTI, Diageo DEO and French food giant Danone. In other words, IPS will stamp your ETF passport a lot more than KXI will. Part of the problem with IPS is weak trading volume at an average of just 11,430 shares per day and the ETF is neither optionable nor shortable, two factors that likely contribute to the slack volume. Still, staples stocks and ETFs aren't all that volatile to begin with and for those searching for short-term gains, there are better destinations than the staples arena. IPS has its merits, far bigger exposure to Nestle than KXI offers being one of them, but even the defensive trade has suffered as global equity markets have continued to weaken over the past month. IPS has not been immune to that downturn and a look at the chart shows if you can catch IPS at support around $30.50, 10% may be had by the end of the year. As for a head-to-head with KXI, KXI barely trumps IPS on a year-to-date basis, but IPS has shined brighter in the past month and three months.