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FSTA vs VDC ETF: Understanding the Differences and Similarities for Consumer Defensive and Discretionary Sector Investment

BY WOM

January 22, 2023

Summary

  • FSTA ETF tracks non-cyclical consumer goods and services companies.
  • VDC ETF tracks discretionary consumer goods and services companies.
  • Holdings and weightings of ETFs can change, check before investing and consult financial advisor.

FSTA vs VDC are both exchange-traded funds (ETFs) that track the performance of different groups of companies, but they have some key differences and similarities.

FSTA, also known as the FlexShares Morningstar Consumer Defensive Index Fund, tracks the performance of companies in the consumer defensive sector. This sector includes companies that produce and sell non-cyclical consumer goods and services, such as food, tobacco, and personal care products. These companies typically have stable and predictable earnings, which makes them less affected by economic downturns.

Here are some companies included in the ETF:

  • Procter & Gamble Co. (PG)
  • Coca-Cola Co. (KO)
  • Philip Morris International Inc. (PM)
  • PepsiCo Inc. (PEP)
  • Walgreens Boots Alliance Inc. (WBA)
  • Conagra Brands Inc. (CAG)
  • Altria Group Inc. (MO)
  • Kraft Heinz Co. (KHC)
  • General Mills Inc. (GIS)
  • Tyson Foods Inc. (TSN)

VDC, also known as the Vanguard Consumer Discretionary ETF, tracks the performance of companies in the consumer discretionary sector. This sector includes companies that produce and sell discretionary consumer goods and services, such as automobiles, clothing, and entertainment. These companies tend to have more volatile earnings, as their sales are more sensitive to economic conditions.

Here are some companies included in the ETF:

  • Amazon.com Inc. (AMZN)
  • Home Depot Inc. (HD)
  • Nike Inc. (NKE)
  • McDonald's Corp. (MCD)
  • The Procter & Gamble Co. (PG)
  • Ford Motor Co. (F)
  • Walt Disney Co. (DIS)
  • General Motors Co. (GM)
  • Tesla Inc. (TSLA)
  • Comcast Corp. (CMCSA)

One of the main similarities between FSTA and VDC is that they are both ETFs and both track the performance of companies in the consumer goods and services sector. However, the main difference between the two is the type of consumer goods and services that they track. FSTA tracks companies that produce and sell non-cyclical consumer goods and services, while VDC tracks companies that produce and sell discretionary consumer goods and services.

Another difference between the two is their risk-return profile. FSTA is considered less risky and more defensive as the companies it tracks are less affected by economic downturns, while VDC is considered more risky and more growth-oriented as the companies it tracks are more sensitive to economic conditions.

Should you invest your hard earned money in these ETFs?

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