PM - IYK Is Pricing Up While Avoiding Downtrading Effects

Summary

• Our concern previously for the IYK was the possibility of downtrading occurring in the product portfolios of the owned companies.
• P&G was the most dangerous area we thought, but it is managing EPS growth regardless. Likewise, Pepsi and PM are resisting downtrading it seems.
• Other brands like Coca-Cola are seeing slight declines in profits despite pricing efforts.
• The godsend of IYK seems to be that it's US exposed, where private label doesn't have the same penetration and exposure.
• The ETF is too expensive, but we acknowledge things might be better for these companies than we originally thought.

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