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Consumer Staples ETFs Take the Lead on Growing Growth Concerns

This article was originally published on ETFTrends.com.

As investors weigh on the growth outlook and strength of our economy, defensive consumer staples sector-related ETFs have been outperforming.

Over the past three months, the Consumer Staples Select SPDR (NYSEArca: XLP)  increased 6.8%, compared to the 3.4% gain for the SPDR S&P 500 ETF (SPY) .

The consumer staples segment has long been viewed as a high-quality and defensive play. The slow and steady nature of the consumer staples business has long been touted as a safe play for all periods since consumers will still need to buy the basic necessities.

Consumer staples are the products that people use frequently and occupy a significant chunk of the average household's budget. The sector provides the goods that shoppers typically consume on a weekly or even daily basis, and many will continue to purchase these products even during a recession.

The sector has been the second-best performing area of the S&P 500 over the past three months, falling just behind high-growth technology stocks. Among the stalwart names, Coca-Cola (KO), Procter & Gamble Co. (PG) and Walmart (WMT) have all been trading at or near all-time highs, the Wall Street Journal reports.

Along with the consumer staples sector, some analysts have highlighted other relatively defensive quality consumer names like McDonalds (MCD) and Starbucks (SBUX). McDonald’s recently jumped to a record after the burger giant’s sales expanded across the world in the latest quarter. Meanwhile, Starbucks’ stock also hit an all-time high last week after the world’s largest coffee chain revealed sales rose in key U.S. and China markets.

The Consumer Discretionary Select Sector SPDR ETF (XLY) , which includes significant exposure to both McDonalds and Starbucks, gained 2.7% over the past three months.

However, the consumer discretionary sector ETF has been outperforming this year, increasing 25.6% year-to-date, whereas XLP advanced 20.5% and SPY gained 22.0% so far this year.

For more information on the market sectors, visit our sector ETFs category.

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