To The Moon

🌟🌟🌟The markets are in a sea of red after President Donald Trump imposed a far reaching reciprocal tariff policy that includes a 10% baseline tariff on almost every country.  Amid this gloomy backdrop, $Consumer Staples Select Sector SPDR Fund(XLP)$ is up 0.58% on Thursday trading and has risen 1.3% in the past 5 days.  XLP is now up 4.6% year todate and in 2024, XLP has risen 10%.  In contrast $SPDR S&P 500 ETF Trust(SPY)$  is down almost 5% on Thursday and 5% in the past 5 days.  SPY has now dropped 8% year todate.  In 2024, SPY is only up 3%.

XLP represents the biggest and strongest US Consumer Staples Giants in just 1 trade.  It tracks a market cap weighted index of consumer staples stocks drawn from the S&P500. 

The Top 10 holdings include Costco Wholesale, Procter & Gamble, Walmart, Coca-Cola, Philip Morris International, PepsiCo, Mondelez International, Colgate Palmolive, Altria Group, Target Corp and Kimberley Clark Corp. 

The Top 10 weightage is 61%.  Total number of holdings is 40.  The expense ratio is 0.09%, one of the lowest among competing ETFs.  The current dividend yield is 2.5%.  Dividends are paid every 3 months.  XLP goes ex dividend on June 23 2025.

Some of the Consumer Staple Companies above  are Dividend Kings.    A Dividend King is a company that has increased its dividend payouts for 50 consecutive years or more.

Take for example Walmart, it has been paying increasing dividends for 52 years running.  Procter and Gamble's record is even better than Walmart as it has been paying increasing dividends for 68 years consecutively.  Coca-Cola is another dividend king with a record of 62 consecutive years of payout increases.  

$Costco(COST)$  is the Top holding of XLP with an almost 10% weightage.  Costco is more than just a place for its millions of members to shop.  It has a renewal membership rate of 93% in the US market even when membership prices increase.  That is great news for investors because it is the membership fees that account for most of Costco's profits.  

Costco has been outperforming its competitors as its comparable store sales in Q4 24 was up 9% compared to Walmart's 5% and Target's 2%.  Costco's share price is up 6.2% year todate and in 2024, it has skyrocketed 37%.

$Procter & Gamble(PG)$  is a consumer goods conglomerate that manufactures and markets a wide range of personal health, personal care and hygiene products.  These include popular brands like Tide, Pampers, Gilette, Olay, Pantene, Oral B, Braun and many more products.  

Proctor and Gamble was founded in 1837 and has grown to be one of the largest consumer staples companies in the world.   Its share price is up 3.8% year todate and in 2024, it has risen by 10.4%.

$Wal-Mart(WMT)$  is the world's largest retailer by revenue followed by Amazon.  Walmart has a strong presence in both physical stores and online.  Walmart topped earnings and revenue estimates for its fiscal 4th quarter but said that its profit growth will slow down in the current fiscal year. 

Walmart's shares is up 2% in the past 5 days but down 3% year todate.  In 2024 Walmart has risen 46%.

These are just the Top 3 holdings in XLP.  

Demand for essential goods like food and household products will remain relatively stable even during economic downturns.  That is why investing in XLP is a defensive strategy to use in the current market mayhem caused by the Trade Tariffs. 

XLP ETF is the largest ETF in this sector with Assets Under Management of USD 16.87 billion. 

Wall Street Analysts are bullish on XLP with a Buy rating, Average Target price of USD 88.89, an upside potential of 8% according to Tipranks. 

I like XLP as it offers me great value for money in the Consumer Staples Sector.  It does the heavy lifting for me in choosing the best stocks and weeding out the non performing ones.  

In the current market downturn, XLP is my tactical bet to counter against the volatility in the markets as well providing me with dividends, which is a great source of passive income while waiting for capital growth. 

@Daily_Discussion  @TigerStars  @Tiger_comments  @CaptainTiger  @TigerClub  @Tiger_SG