KXI vs. IYK: KXI Has More International Holdings, But IYK Has a Higher Dividend Yield

The iShares US Consumer Staples ETF (NYSEMKT:IYK) and iShares Global Consumer Staples ETF (NYSEMKT:KXI) both track the consumer staples sector, but KXI includes a broader mix of global holdings, while IYK focuses on U.S. companies, and the two differ on recent performance, yield, and diversification.

Both IYK and KXI target the consumer staples segment, appealing to investors seeking defensive sector exposure. IYK is built around U.S. staples giants, while KXI casts a wider net globally. This comparison highlights how each fund stacks up on cost, risk, and portfolio makeup for those weighing home market focus versus international breadth.

Snapshot (Cost & Size)

Beta measures price volatility relative to the S&P 500; beta is calculated from five-year weekly returns. The 1-yr return represents total return over the trailing 12 months.

Costs are nearly identical between the two, with KXI charging just 0.01 percentage points more in annual expenses. IYK’s yield is modestly higher, offering a larger payout for income-focused investors.

Performance & Risk Comparison

What's Inside

KXI holds 96 global equities in the consumer staples sector. Its top positions include Walmart Inc (NASDAQ:WMT), Costco Wholesale Corp (NASDAQ:COST), and Philip Morris International Inc (NYSE:PM). The portfolio skews 97% toward consumer defensive names, with a small tilt to consumer cyclicals, and has a fund history stretching more than 19 years.

IYK, by contrast, is concentrated on the U.S. market with 54 holdings. Its largest weights are Procter & Gamble (NYSE:PG), Coca-cola (NYSE:KO), and Philip Morris International Inc. The fund is heavily tilted toward consumer defensive stocks but also has exposure to healthcare and basic materials, reflecting a slightly broader sector mix within U.S. borders.

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What This Means For Investors

iShares US Consumer Staples ETF (IYK) and iShares Global Consumer Staples ETF (KXI) are two of the best-known consumer sector ETFs. Here are the key similarities and differences that investors should know.

To begin, let's examine the similarities. Both funds boast nearly identical expense ratios. IYK has an expense ratio of 0.38%, while KXI's expense ratio is 0.39%. Recent performance between the two funds is also very similar. Over the last five years, IYK has generated a total return of 29%, while KXI has generated a total return of 30%. Lastly, both funds are around the same size. KXI has approximately $900 million in AUM, while IYK has about $1.2 billion.

Turning to differences, fund holdings are one area that separates these funds. IYK holds only 54 stocks, led by iconic U.S. companies like Coca-Cola and Procter & Gamble. KXI, on the other hand, holds 96 stocks, including some prominent international consumer stocks like Nestle and Unilever. As for income, IYK boasts the larger dividend yield of 2.7% versus 2.2% for KXI.

In sum, income-oriented investors may favor IYK thanks to its higher dividend yield, along with investors seeking exposure to the U.S. consumer market. Meanwhile, those with a desire for international exposure, or who have less of a need for income, may turn to KXI given its greater international holdings and lower dividend yield.

Glossary

ETF: Exchange-traded fund, a basket of securities that trades on an exchange like a stock.
Consumer staples sector: Companies selling essential everyday products, such as food, beverages, and household goods.
Defensive sector: Industry group that tends to be less sensitive to economic cycles, often providing more stable returns.
Diversification: Spreading investments across many holdings to reduce the impact of any single position’s performance.
Expense ratio: Annual fund fee, expressed as a percentage of assets, covering management and operating costs.
Dividend yield: Annual dividends per share divided by the share price, showing income return percentage.
Total return: Investment performance including price changes plus all dividends and distributions, assuming reinvestment.
Beta: Measure of an investment’s volatility relative to the overall market, typically compared with the S&P 500.
Assets under management (AUM): Total market value of all assets that a fund or manager oversees.
Max drawdown: Largest peak-to-trough decline in value over a specific period, showing worst historical loss.
Consumer defensive: Another term for consumer staples; companies providing essential goods that people buy regardless of the economy.
Consumer cyclicals: Companies selling non-essential goods and services whose demand typically rises and falls with the economy.

Jake Lerch has positions in Coca-Cola, Philip Morris International, and Procter & Gamble. The Motley Fool has positions in and recommends Costco Wholesale and Walmart. The Motley Fool recommends Nestlé, Philip Morris International, and Unilever. The Motley Fool has a disclosure policy.