iShares Global Consumer Staples ETF: Consumer Staples Dashboard For March (NYSEARCA:KXI)

This is the second most overvalued sector, and no industry looks really attractive. The most overpriced one is personal care products. Fast facts on iShares Global Consumer Staples ETF, an international alternative to XLP.

iShares Global Consumer Staples ETF: Consumer Staples Dashboard For March (NYSEARCA:KXI)

Current Data

The next table shows the metrics and scores as of last week's closing. Columns stand for all the data named and defined above.

	VS	QS	EY	SY	FY	ROE	GM	EYh	SYh	FYh	ROEh	GMh	RetM	RetY
Staple/Food Retail	-19.88	-12.79	0.0313	1.9723	0.0188	14.60	19.12	0.0418	1.9066	0.0303	16.60	22.12	-4.22%	-4.97%
Food	-11.23	4.49	0.0505	0.6636	0.0133	18.56	29.38	0.0456	0.6642	0.0239	15.40	33.22	-1.19%	11.99%
Beverage	-5.97	-22.50	0.0293	0.2869	0.0161	16.57	45.51	0.0361	0.2673	0.0172	24.09	52.78	-2.44%	7.29%
Household prod.	-12.72	-23.31	0.0513	1.1900	0.0052	10.45	37.95	0.0456	0.8789	0.0373	17.26	40.88	-9.46%	-34.75%
Personal care	-36.38	0.67	0.0290	0.3408	0.0075	18.53	62.88	0.0378	0.4480	0.0197	20.98	55.64	-1.47%	0.30%
Tobacco	31.21	-39.38	0.0684	0.7755	0.0174	8.38	50.80	0.0588	0.4741	0.0153	34.54	52.39	-7.26%	0.35%

Value And Quality Chart

The next chart plots the Value and Quality Scores by industry (higher is better).

Evolution Since Last Month

Valuation has improved in food and retail. Quality has deteriorated in household products and tobacco.

Momentum

The next chart plots momentum data.

Interpretation

According to my S&P 500 monthly dashboard, consumer staples are the second most overvalued sector after industrials. The tobacco industry is undervalued by about 30% relative to 11-year averages. However, this is offset by the worst quality score in the sector. A note of caution about sample size: there are only five tobacco companies in my reference universe, so statistics in this industry aren't the most reliable. Other subsectors are overvalued by 6% to 36%, and quality metrics don't justify it. Personal care is the most overvalued one.

Fast Facts on KXI

The iShares Global Consumer Staples ETF was launched on 09/12/2006 and tracks the S&P Global 1200 Consumer Staples Capped Index. It has 95 holdings and a 12-month distribution yield of 2.07%. The total expense ratio of 0.40% is more expensive than for U.S. index ETFs like XLP, whose fee is 0.10%. About 55% of asset value is invested in U.S. companies and 33% in Europe. Large and mega-cap companies represent 90% of asset value.

The next table lists the top 10 holdings with fundamental ratios. The portfolio is quite concentrated: their aggregate weight is 49.4%.

Ticker	Name	Weight%	EPS growth %TTM	P/E TTM	P/E fwd	Yield%	Exchange
PG	Procter & Gamble Co.	8.67	0.63	25.10	24.51	2.56	NYSE
OTCPK:NSRGY*	Nestlé SA	8.31	-46.04	32.87	21.85	2.70	Switz.
PEP	PepsiCo, Inc.	5.34	16.90	27.52	24.37	2.61	NASDAQ
COST	Costco Wholesale Corp.	4.61	9.73	35.80	33.65	0.74	NASDAQ
KO	The Coca-Cola Co.	4.33	-2.59	27.50	23.22	3.05	NYSE
WMT	Walmart, Inc.	4.23	-12.32	32.34	22.58	1.65	NYSE
PM	Philip Morris International, Inc.	4.06	-0.20	16.41	15.14	5.33	NYSE
UL*	Unilever PLC	3.57	12.32	16.08	17.98	3.56	London
OTCPK:LRLCY*	L'Oréal SA	2.82	15.32	36.22	32.23	1.57	Paris
DEO*	Diageo PLC	2.74	6.66	22.87	21.18	2.08	London

Ratios: Portfolio123.

* I refer to the US tickers to link to Seeking Alpha ticker page, but the fund holds shares in primary exchanges.

Since inception, KXI has underperformed the U.S. consumer staples benchmark XLP by 1.8 percentage point, and shows a higher risk measured in maximum drawdown.

	Total Return	Annual Return	Max Drawdown	Sharpe
KXI	237.44%	7.65%	-42.27%	0.57
XLP	337.66%	9.37%	-32.39%	0.71

In summary, KXI is an ETF for investors seeking international exposure in consumer defensive stocks. It is not currency-hedged, which may be a bad point or a good one depending on one's expectation about the dollar. The portfolio is quite heavy in the top two holdings: PG and Nestle represent 17% of asset value together. These are time-tested companies, but investors who want a more diversified portfolio may prefer the Invesco S&P 500 Equal Weight Consumer Staples ETF (Original Post>

Dashboard List

I use the first table to calculate value and quality scores. It may also be used in a stock-picking process to check how companies stand among their peers. For example, the EY column tells us that a food company with an earnings yield above 0.0505 (or price/earnings below 19.80) is in the better half of the industry regarding this metric. A Dashboard List is sent every month to Quantitative Risk & Value subscribers with the most profitable companies standing in the better half among their peers regarding the three valuation metrics at the same time. The consumer staples stocks below are part of the list sent to subscribers at the beginning of this month.

USNA	USANA Health Sciences, Inc.
COKE	Coca-Cola Consolidated, Inc.

It is a rotational model with a statistical bias toward excess returns on the long-term, not the result of an analysis of each stock.

Editor's Note: This article discusses one or more securities that do not trade on a major U.S. exchange. Please be aware of the risks associated with these stocks.