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Exchange-traded funds offer a convenient way to invest in sectors or niches that interest you. If you'd like to add some consumer-staple stocks to your portfolio, the Consumer Staples Select Sector SPDR (NYSEMKT: XLP  ) could save you a lot of trouble. Instead of trying to figure out which companies will perform best, you can use this ETF to invest in lots of them simultaneously.

The basics
ETFs often sport lower expense ratios than their mutual fund cousins. The SPDR ETF's expense ratio -- its annual fee -- is a very low 0.18 %. It recently yielded 2.8%, too.

This ETF has performed well, beating the world market over the past three, five, and 10 years. As with most investments, of course, we can't expect outstanding performances in every quarter or year. Investors with conviction need to wait for their holdings to deliver.

Why consumer staples?
By definition, staples are items that we tend to buy no matter what the economy is doing. That makes companies making or selling staples attractive, as they add a defensive element to a portfolio, bolstering it in downturns.

More than a handful of consumer-staple companies had solid performances over the past year. Purchases of cigarettes are non-optional to most smokers, as they're addicted to them, and that helped Altria (NYSE: MO  ) and Philip Morris International (NYSE: PM  ) advance 18% and 11%, respectively. (The stocks yield 5.2% and 3.7%, respectively, too.) The latter is a spin-off of the former, focusing on sales outside the U.S., where the growth potential is higher and regulations and restrictions often lower. In the U.S., Altria faces a shrinking base of smokers and various other challenges such as anti-smoking campaigns and a possible ban of menthol cigarettes. Still, it's been growing.

Philip Morris has a new CEO, and one of its recent promising developments is news that tobacco might be used in flu vaccines. Meanwhile, though, it's being hurt by a strong dollar but should eventually get a boost from a recovering Europe.

Sysco (NYSE: SYY  ) , leading in the delivery of food products to restaurants and other institutions, gained 18%, for example, and recently yielded 3.3%. The stock is near its 52-week high, despite challenges from weak restaurant traffic and rising food costs, but our improving economy should help. Meanwhile, it's a dividend titan and has been able to maintain its profit margins while cutting costs. It's planning to expand internationally, too. Sysco isn't likely to be a rapid grower, but it can be a relatively steady performer for you.

Mondelez International (NASDAQ: MDLZ  ) , spun off from Kraft (UNKNOWN: KRFT.DL  ) to focus on the international arena, gained 14%. It's able to grow faster than its North American counterpart, as many foreign economies are developing and more dynamic than the established first world. The company recently announced plans to buy back up to $1.2 billion worth of shares, though that might not be advisable until the shares seem cheap. Right now, the company's P/E is 33 and its forward P/E is 16 -- and it carries a lot of debt as well, though it has been paying that down.

The big picture
Demand for staples isn't going away anytime soon. A well-chosen ETF can grant you instant diversification across any industry or group of companies -- and make investing in and profiting from it that much easier.

Tobacco companies have been under siege in the U.S. for decades, as waves of litigation, regulation, and anti-smoking campaigns have given the industry a black eye. Yet Philip Morris International focuses on overseas markets, where business prospects generally look brighter. Investors have been happy with its stock's performance, but is Philip Morris still a buy? Find out in The Motley Fool's premium research report on the company, which includes in-depth analysis of its opportunities and challenges ahead. To claim your report just click here now.

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