Opinions
Stan Wong
iShares S&P/TSX Cap. Cons. St.
XST-T
WATCH
Aug 26, 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.
Consumer Staples has done very, very well in Canada. A lot of the names in this have done very well, because a lot of investors have moved into the safer part of the index. This is one of the most defensive areas that you want to look at. However, a lot of the names are starting to get expensive in terms of their valuations. Be careful about how extended some of these valuations are. If interest rates start to move higher, you might want to pair back your holdings in this.