iShares Global Consumer Staples ETF

KXI

Market cap $871M

As AI-fueled gains spark bubble warnings, investors are eyeing defensive ETFs in consumer staples, utilities and healthcare for safety.

KXI offers global consumer staples exposure with defensive appeal but underperforms peers due to weaker international holdings, higher costs, and diluted large-cap concentration. Yield contribution is stable, but capital appreciation lags peers, leaving total returns (~5.3% CAGR) below XLP and VDC. Current cyclical highs reduce the probability of near-term upside; defensive strength justifies a Hold in uncertain macro conditions.

Consumer staples are a defensive sector, and KXI offers global exposure, enhancing portfolio resilience amid economic uncertainty. iShares Global Consumer Staples ETF stands out with its international diversification, capturing growth from emerging markets and the rising global middle class, especially in Asia. Despite higher fees and some risks like currency and liquidity, KXI has recently outperformed U.S.-focused peers and is less concentrated in top holdings.

This article provides a top-down analysis of the consumer staples sector, focusing on value, quality, and momentum metrics for industry evaluation. The sector is currently undervalued by about 9% based on my metrics, with the household products industry being the most undervalued and tobacco the most overvalued. iShares Global Consumer Staples ETF (KXI) offers international exposure with a higher expense ratio and lower historical return than XLP.

Investors seeking defensive exposure beyond a broad-based consumer staples exchange-traded fund (ETF) might look to a number of unique funds nonetheless notable for their recent performance. Consumer staples companies appeal to investors when recession fears mount for their supposed resilience in the face of difficult economic conditions.

With the S&P 500 officially in correction territory and mounting fears that tariffs and trade wars will lead to a nasty economic downturn, it's not too difficult to envision the 10% drawdown turning into a 20% one.

Consumer spending has been a strong point in the economy, but recent headwinds are building. The consumer discretionary sector has felt pressure due to recessionary concerns on top of pricing inflation from potential tariffs.

As reports that inflation heated up in January 2025 emerged on February 12, the market shuddered, with the Dow dropping by more than 300 points in morning trading. The recent Consumer Price Index report may be enough to prompt investors to take a cautious stance, particularly as the impact of recent aluminum and steel tariffs has yet to be seen and the threat of tariffs on Mexican and Canadian goods remains in play.

iShares Global Consumer Staples ETF invests in about 120 global consumer staples stocks, but has higher expenses and weaker growth prospects than U.S.-focused funds. KXI's portfolio is 62.1% U.S. stocks, providing stability during economic downturns but lagging in capital appreciation compared to other sectors and broader market funds. KXI has underperformed U.S. consumer staples funds like FSTA and IYK due to lower exposure to globally dominant U.S. stocks and currency risks.

We are officially into the busiest time on the shopping calendar.