Topic: How To Invest

Q: Hi, Pat. I am a longtime Inner Circle member and I would like your opinion on two Vanguard consumer ETFs—VDC and VCR. Thanks.

Article Excerpt

A: Vanguard Consumer Discretionary ETF, $159.56, symbol VCR on New York, aims to track the MSCI US IMI Consumer Discretionary 25/50 Index. That index follows U.S. consumer discretionary companies. Those firms, in the manufacturing and service industries, are highly sensitive to economic cycles. The manufacturing segment includes producers of household durable goods, textiles and leisure equipment as well as automakers. The services segment includes hotels, restaurants and other leisure facilities, along with media production companies and clothing retailers. The “25/50” in the fund’s name refers to two things: no stock can represent more than 25% of the portfolio; and total weighting of all stocks with 5% or more of the portfolio’s assets is capped at 50%. The ETF’s total assets are $3.1 billion, and its top holdings are Amazon.com, 20.3%; Home Depot, 7.2%; McDonald’s, 4.9%; Nike, 3.4%; Booking Holdings, 3.2%; Starbucks, 2.9%; Lowes Cos., 2.1%; TJX Cos., 2.5%; General Motors, 1.7%; and Tesla, 1.5%. The fund’s breakdown by segment follows: Internet & Direct…

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