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.
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.