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ETF Specialist

A Cheap Way to Bulk Up on Consumer Exposure

This low-cost ETF offers a basket of consumer-discretionary firms whose success hinges on consumer sentiment.

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U.S. consumer discretionary firms have outperformed the broader market in 2015. Lower gas prices and higher employment have offset consumers' concerns about anemic real wage growth, higher cost-of-living expenses on items such as rent and health care, and broad stock market weakness. And even recently declining consumer sentiment readings still are well above their levels of a year ago.

Despite recent market uncertainty, U.S. consumers remain generally confident and optimistic. Generally, affluent consumers are showing very strong sentiment, while lower- and middle-income consumers are taking a more measured view. The result is that, thus far this year, consumer discretionary firms largely have held up nicely, meaningfully outpacing the S&P 500.

Robert Goldsborough does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.