Beyond XLY: Three Better Consumer Discretionary ETFs
Wednesday, February 3rd, 2010Michael Johnston submits:
Through the eyes of an investors, the consumer sector of the global economy is generally split into two segments: consumer staples and consumer discretionaries. Consumer staples stocks generally include those that manufacture and sell goods that are vital components of most household budgets, such as food and non-durable household goods. Companies producing goods that are deemed to be more of a luxury spend are classified as consumer discretionary stocks.
Historically, investors looking for low beta have gravitated towards consumer staples, while those looking to make a leveraged play on the health of the broad overall economy have embraced the consumer discretionary sector. The Consumer Staples Select Sector SPDR Fund (XLY) has a beta of 1.11 relative to the S&P 500, compared to only 0.49 for the Consumer Staples SPDR (XLP).
