Quarter-End Insights

Consumer Defensive: Meaningful Opportunity in Tobacco

Erin Lash, CFA

The Morningstar Global Consumer Defensive Index held up comparably well in the fourth quarter, sliding 7% through Dec. 20 versus a 14% drop for the broader market. Still, consumer defensive shares are off 10% for the year, in line with the overall market (Exhibit 1) amid concerns about the competitive landscape and the ability of firms to offset higher commodity and transportation costs by increasing prices.

Exhibit 1: Sector has modestly outperformed the market

Erin Lash, CFA does not own shares in any of the securities mentioned above. Find out about Morningstar's editorial policies.