Consumer Discretionary Sector Outperformed the Broad Market
All Eyes On Consumer Discretionary Earnings after Strong Jobs Data
Performance Analysis
The consumer discretionary sector is a sub-sector of retail which includes companies that sell goods and services that are not essential, the demand for which rises and falls with the condition of the economy.
The United States has a consumer-driven economy. The performance of the consumer discretionary sector is seen as a major indicator of the US economy’s health. When we look at the S&P 500 Consumer Discretionary Index (S5COND), we see that it has grown by 19.8% in the last year and has been able to beat the S&P 500 (SPX), the broader market index, by quite a margin. The SPX has grown by only 3.3% in the last year as of November 6, 2015.
Best-performing consumer discretionary ETFs year-to-date
As we saw earlier, the consumer discretionary sector has had quite a decent run, and after the labor data released on Friday, November 6, 2015, this trend is likely to continue. For this reason, it’s important for investors to know which ETFs in the consumer discretionary sector are performing well and which are not.
The chart above shows that on a year-to-date basis, the Consumer Discretionary Select Sector ETF (XLY) has outperformed the other consumer discretionary ETFs, with a return of 14.0% and the least amount of volatility in the last 30 days. The Vanguard Consumer Discretionary ETF (VCR) has returned 10.4% to its investors for the same period.
Both XLY and VCR have high exposures to Amazon (AMZN), which has been a major reason for their good performances. Amazon has provided a total return of ~112.0% on a year-to-date basis. XLY and VCR also have exposure to Walt Disney (DIS) and Home Depot (HD).
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