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Consider This ETF as Volatility Returns to the Market

Baystreet.ca

The S&P/TSX Composite Index plunged 162 points on May 23. North American indexes have encountered turbulence in the month of May as the U.S.-China trade war threatens global growth. It has been a huge factor in negatively impacting investor sentiment.

With that in mind, investors may want to migrate to more stable equities.

The iShares S&P/TSX Capped Consumer Staples ETF (TSX:XST) aims to target exposure to Canadian consumer staples companies. Consumer staples include food, beverages, drugs, hygiene products and medical supplies.

These consumer-linked stocks offer a defensive option to investors and have historically proven resilient during slow growth periods.

The ETF finished the day up 0.08%. The fund has seen its price increase 14.6% in 2019 so far. Some of its top holdings include Loblaw Companies (TSX:L), the largest grocery retailer in Canada, Saputo (TSX:SAP), a Canadian dairy giant that is one of the top dairy processors in the world, and Maple Leaf Foods (TSX:MFI), one of the top meat packaging companies in Canada.

Concerns over global trade and lower domestic growth have the potential to hit the financial and energy sector hard as we look ahead to June.

Both sectors led declines on the TSX on May 23. Investors looking for more stability in the second half of 2019 might want to consider this ETF for their portfolios. Consumer staples is one of the safest bets in the equity market during turbulent stretches.