Opinions
John Kim
iShares S&P/TSX Cap. Cons. St.
XST-T
COMMENT
Aug 22, 2016
Stock price when the opinion was issued
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Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. A good starting point for a Canadian sector exposure. The majority of its holdings is ATD, L, MRU and WN. If you want to forgo the ETF fee, it could be an alternative to buy these stocks. However, a good ETF for the sector. Unlock Premium - Try 5i Free
XST is made up of Canadian retail grocers. Huge weight in Loblaw and Couche-Tard, making up about half of the ETF. Rest will be Metro, Weston, Empire, Saputo, Maple Leaf. Somewhat resilient. No matter what happens in an economy, people need groceries. Less volatility than ZLU.
ZLU is low volatility exposure to a broader cohort of stocks, not just consumer staples. A US play. Lower volatility, but broader economic exposure. Will tend to outperform the S&P 500 in a market correction. Really likes it.
The Canadian consumer staple index and has only a handful of names. People have gravitated towards this because they see stable revenues and stable cash flows. For that stability, they have afforded them really big multiples. For whatever period your holding is, that multiple must not shrink. Even if their earnings goes up, if the multiple shrinks fast enough, the stocks will come down.