Exchange-traded funds offer a convenient way to invest in sectors or niches that interest you. If you're worried about what the economy might do next and want to add more defensive stocks to your portfolio, the Focus Morningstar Consumer Defensive Index ETF
ETFs often sport lower expense ratios than their mutual fund cousins. The Focus Morningstar ETF's expense ratio -- its annual fee -- is a very low 0.19%.
This ETF doesn't have a sufficient track record to assess, though, as it's very young. 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. The fund is very small, too, so if you're thinking of buying, beware of occasionally large spreads between its bid and ask prices. Consider using a limit order if you want to buy in.
With a low turnover rate of 4%, this fund isn't frantically and frequently rejiggering its holdings, as many funds do.
What's in it?
Plenty of defensive consumer companies had strong performances over the past year. Philip Morris International
Despite headwinds such as tougher regulations, steep cigarette taxes, and the somewhat fading popularity of smoking, U.S.-focused Altria also did well over the past year, gaining 23%. The company has been cutting costs and boosting its dividend. It has also been diversifying into areas such as smokeless tobacco, cigars, and even wines.
Other companies didn't do as well last year but could see their fortunes change in years to come. Walgreen
Archer Daniels Midland
The big picture
Demand for defensive consumer offerings isn't going away anytime soon -- sort of by definition. 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.
Longtime Fool contributor Selena Maranjian, whom you can follow on Twitter, holds no position in any company mentioned. Click here to see her holdings and a short bio. Motley Fool newsletter services have recommended buying shares of Express Scripts and Philip Morris International. The Motley Fool has a disclosure policy.