Launched on 06/12/2000, the iShares U.S. Consumer Discretionary ETF (
IYC Quick Quote IYC - Free Report) is a passively managed exchange traded fund designed to provide a broad exposure to the Consumer Discretionary - Broad segment of the equity market.
An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also excellent vehicles for long term investors.
Additionally, sector ETFs offer convenient ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. Consumer Discretionary - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 10, placing it in bottom 38%.
The fund is sponsored by Blackrock. It has amassed assets over $955.27 million, making it one of the largest ETFs attempting to match the performance of the Consumer Discretionary - Broad segment of the equity market. IYC seeks to match the performance of the Dow Jones U.S. Consumer Services Index before fees and expenses.
The Russell 1000 Consumer Disc 40 Act 15/22.5 Daily Capped Index measures the performance of the consumer services sector of the U.S. equity market.
When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.
Annual operating expenses for this ETF are 0.41%, making it one of the cheaper products in the space.
It has a 12-month trailing dividend yield of 0.53%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Consumer Discretionary sector--about 73.10% of the portfolio. Consumer Staples and Telecom round out the top three.
Looking at individual holdings, Amazon Com Inc (
AMZN Quick Quote AMZN - Free Report) accounts for about 13.56% of total assets, followed by Tesla Inc ( TSLA Quick Quote TSLA - Free Report) and Walt Disney ( DIS Quick Quote DIS - Free Report) .
The top 10 holdings account for about 50.38% of total assets under management.
Performance and Risk
Year-to-date, the iShares U.S. Consumer Discretionary ETF has lost about -27.40% so far, and is down about -18.39% over the last 12 months (as of 05/17/2022). IYC has traded between $60.14 and $86.98 in this past 52-week period.
The ETF has a beta of 1.11 and standard deviation of 23.92% for the trailing three-year period, making it a medium risk choice in the space. With about 180 holdings, it effectively diversifies company-specific risk.
IShares U.S. Consumer Discretionary ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, IYC is a reasonable option for those seeking exposure to the Consumer Discretionary ETFs area of the market. Investors might also want to consider some other ETF options in the space.
Vanguard Consumer Discretionary ETF (
VCR Quick Quote VCR - Free Report) tracks MSCI US Investable Market Consumer Discretionary 25/50 Index and the Consumer Discretionary Select Sector SPDR ETF ( XLY Quick Quote XLY - Free Report) tracks Consumer Discretionary Select Sector Index. Vanguard Consumer Discretionary ETF has $4.97 billion in assets, Consumer Discretionary Select Sector SPDR ETF has $15.79 billion. VCR has an expense ratio of 0.10% and XLY charges 0.10%. Bottom Line
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