VDC vs. KXI: A Spot of Both?

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Now, a chap might find himself in a bit of a pickle when contemplating the realm of consumer staples ETFs. It’s a positively bewildering landscape, isn’t it? We have the Vanguard Consumer Staples ETF (VDC 0.09%) and the iShares Global Consumer Staples ETF (KXI 0.14%), both attempting to provide a haven for one’s funds amidst the vagaries of the market. VDC, you see, is a distinctly American affair, keeping its investments largely within Uncle Sam’s borders, while KXI, rather more adventurous, casts its net globally. A dash of both, one might think, wouldn’t go amiss, but as always, the devil is in the details, and those details, my friends, involve a spot of financial scrutiny.

Both of these funds, you understand, aim to provide exposure to those companies peddling the things one simply must have, regardless of whether the economic ship is sailing smoothly or battling a bit of a squall. A most sensible approach, naturally. But which one, precisely, is the better conveyance for a prudent investor’s hard-earned cash? Let’s have a look, shall we, at the costs, the returns, the general air of respectability, and the composition of their respective portfolios.

A Snapshot, If You Please

Metric VDC KXI
Issuer Vanguard iShares
Expense Ratio 0.09% 0.39%
1-yr Return (as of 2026-01-16) 9.0% 14.8%
Dividend Yield 2.26% 2.30%
Beta 0.55 0.55
AUM $8.5 billion $884.8 million

Now, the expense ratio, as any seasoned investor knows, is a most important consideration. KXI, at 0.39%, is a trifle on the steep side, a good three-tenths of a percentage point more than VDC’s remarkably reasonable 0.09%. A small difference, perhaps, but over the long haul, it can add up, you know. KXI does, however, offer a slightly more generous dividend yield – 2.30% to VDC’s 2.26%. A pleasant little bonus, but hardly enough to set the Thames on fire.

Performance and a Bit of Risk

Metric VDC KXI
Max Drawdown (5 y) (16.55%) (17.43%)
Growth of $1,000 over 5 years $1,481 $1,322

Now, let’s consider the performance. KXI did rather well over the past year, but VDC has consistently outperformed over the longer term. Since 2006, VDC has generated annualized total returns of 9.5%, while KXI managed a respectable, but slightly less impressive, 7.6%. This is most intriguing, as the top five holdings of both funds are, remarkably, the very same stocks. It appears Vanguard simply has a knack for filling out the rest of the portfolio with a bit more finesse.

KXI invests in 96 companies across the globe, with a portfolio consisting almost entirely of consumer defensive stocks – the things one buys even when feeling a bit strapped for cash. Its largest holdings include Walmart, Costco Wholesale, and Philip Morris International. VDC, on the other hand, is rather more focused on the American market, with 98% of its holdings in consumer defensive stocks, and a similar top three: Walmart, Costco, and Procter & Gamble. Both funds are admirably free of leverage and other exotic complications, but VDC’s larger size and focus on the U.S. market might appeal to those seeking simplicity and scale.

For further guidance on the rather complex world of ETF investing, one might consult a more detailed guide at this link.

What It All Means, Old Boy

If an investor has a penchant for international exposure, KXI is the obvious choice, with only 60% of its holdings in the U.S. The U.K. accounts for 12%, Japan for 6%, and Switzerland and France for 5% each. However, a good many of the core holdings in VDC are U.S.-based companies that generate a substantial share of their sales overseas, so they offer a good deal of “hidden” global diversification, regardless.

Ultimately, I’d lean towards VDC, primarily because of its considerably lower expense ratio. Both ETFs are relatively low-beta, offer similar dividend yields, trade at comparable valuations, and hold very similar stocks. Therefore, keeping costs as low as possible seems the most sensible course of action, particularly given VDC’s outperformance over the past two decades. A dash of prudence, you see, never goes amiss.

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2026-01-20 03:34