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ETF Chart of the Day: Consumer Discretionary Sector

tlydon@globaltrend.com (Tom Lydon)

Thus far this week we have seen the major indices briefly challenge recent highs, only to fall back and in the case of the S&P 500 Index, flirt with the 50 day moving average once again.

That said, the U.S. Consumer Discretionary sector has experienced asset inflows this week, specifically with SPDR Consumer Discretionary (XLY - News) reeling in more than $300 million, which is equivalent to about 10% of the assets currently in the fund.

The index is exposed to equities that fall in subcategories including retail, media, hotels, restaurants and leisure, household durables, textiles, apparel and luxury goods, automobiles, auto components and distributors, leisure equipment and products, and diversified consumer services. [What Consumer ETFs are Saying About the Market]

XLY takes a market cap weighted approach, like all Sector SPDR products, tracking S&P indices and weighting holdings based on “stock price multiplied by shares outstanding.” Top holdings in XLY are currently, MCD, AMZN, CMCSA, HD, and DIS.

Vanguard and iShares also offer market cap weighted approaches, in Vanguard Consumer Discretionary (VCR - News) and iShares Dow Jones U.S. Consumer Services (IYC - News).

VCR tracks an MSCI formulated Consumer Discretionary based index while IYC, as its name suggests, uses a Dow Jones index approach. Guggenheim S&P 500 Equal Weight Consumer Discretionary (RCD - News) tracks the same index as XLY, except the index components are equally weighted and rebalanced quarterly so as to keep the holdings in line.

First Trust Consumer Discretionary AlphaDEX (FXD - News) employs a proprietary quantitative/fundamentally based strategy as does PowerShares Dynamic Consumer Discretionary (PEZ - News).

Additionally, a relative newcomer to the space, FocusShares Morningstar Consumer Cyclical (FCL - News) tracks a Morningstar based sector index.

Despite having a little over a year of live returns, FCL has demonstrated impressive performance, and of the aforementioned products, has the highest trailing one year return at +16.12%. The other funds have returned as follows during this same time period: IYC +14.90%, RCD +13.67%, XLY +13.26%, PEZ +13.01%, and FXD +5.92%.

FocusShares Morningstar Consumer Cyclical

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