So what will be the benefit compared to a fully diversified index? Why not truly diversify instead of making a sectorial bet. Unless you do have a thesis why it will overperform that sounds like a very bad idea.
The „thesis“ or idea should be obvious: consumer staples are relatively low-risk and less volatile stocks. Most of the biggest companies in the sector have been have around forever (many decades), are well diversified in brands and geographically. Just as the big retailers like Aldi, Lidl and coop, they won‘t be going anywhere, not even in severe crises. Also, while competition between Lidl and Aldi, or coop and Migros, may be fierce, these retailers aren’t going to price the other one out of the market.
Investment or portfolio allocation shouldn‘t be only about margins, earnings or gains - but also about personal risk tolerance and what one personally feels comfortable with (which may very well be investing into known brands).
Which index is „fully diversified“?
Commonly cited „World“ or country stock indices are far from „fully diversified“ with regards to the actual economies they‘re named after. They‘re merely a representation of the companies listed on certain particular stock exchange(s) - but not necessarily a very good or appropriately diversified reflection of the country‘s or region‘s economy.
Poland, for example, is the fifth most populous EU country, and I‘m sure it‘s a very well-diversified modern industrial and/or services economy. Yet more than 40% of MSCI Poland is bascially banks (and insurance?).
Anyway if someone wants to diversify in order to reduce risk, at some point it doesn’t really matter anymore because the diversification effect is affected by the law of diminishing returns. At some point, it doesn’t really matter anymore if you throw in more titles and diversify even more, the effect is very minimal.
Actually, at some point, further diversification just costs you money without having a huge impact.
OP didn’t have a thesis, did not seem to know about index funds, etc. The goal was to educate (that they should do more research at this point since there were gaps they needed to cover first).
Once we’re past that stage, we can start arguing about the fine point (whether consumer staples is good low risk investment, what is good diversification, etc.). But in my opinion there’s some baseline we first need to teach.