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Should You Invest in the Consumer Discretionary Select Sector SPDR ETF (XLY)?
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Designed to provide broad exposure to the Consumer Discretionary - Broad segment of the equity market, the Consumer Discretionary Select Sector SPDR ETF (XLY - Free Report) is a passively managed exchange traded fund launched on 12/16/1998.
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.
Sector ETFs are also funds of convenience, offering many 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 11, placing it in bottom 31%.
Index Details
The fund is sponsored by State Street Global Advisors. It has amassed assets over $13.77 billion, making it the largest ETF attempting to match the performance of the Consumer Discretionary - Broad segment of the equity market. XLY seeks to match the performance of the Consumer Discretionary Select Sector Index before fees and expenses.
The Consumer Discretionary Select Sector Index seeks to provide an effective representation of the consumer discretionary sector of the S&P 500 Index.
Costs
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are the same.
Annual operating expenses for this ETF are 0.10%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 0.90%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. 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 100% of the portfolio.
Looking at individual holdings, Amazon.com Inc. (AMZN - Free Report) accounts for about 17.87% of total assets, followed by Tesla Inc (TSLA - Free Report) and Home Depot Inc. (HD - Free Report) .
The top 10 holdings account for about 65.84% of total assets under management.
Performance and Risk
So far this year, XLY has added roughly 10.72%, and is down about -11.77% in the last one year (as of 03/09/2023). During this past 52-week period, the fund has traded between $126.26 and $191.53.
The ETF has a beta of 1.18 and standard deviation of 29.66% for the trailing three-year period, making it a medium risk choice in the space. With about 58 holdings, it effectively diversifies company-specific risk.
Alternatives
Consumer Discretionary Select Sector SPDR ETF holds a Zacks ETF Rank of 1 (Strong Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, XLY is an excellent option for investors seeking exposure to the Consumer Discretionary ETFs segment of the market. There are other additional ETFs in the space that investors could consider as well.
Fidelity MSCI Consumer Discretionary Index ETF (FDIS - Free Report) tracks MSCI USA IMI Consumer Discretionary Index and the Vanguard Consumer Discretionary ETF (VCR - Free Report) tracks MSCI US Investable Market Consumer Discretionary 25/50 Index. Fidelity MSCI Consumer Discretionary Index ETF has $1.02 billion in assets, Vanguard Consumer Discretionary ETF has $4.07 billion. FDIS has an expense ratio of 0.08% and VCR charges 0.10%.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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Should You Invest in the Consumer Discretionary Select Sector SPDR ETF (XLY)?
Designed to provide broad exposure to the Consumer Discretionary - Broad segment of the equity market, the Consumer Discretionary Select Sector SPDR ETF (XLY - Free Report) is a passively managed exchange traded fund launched on 12/16/1998.
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.
Sector ETFs are also funds of convenience, offering many 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 11, placing it in bottom 31%.
Index Details
The fund is sponsored by State Street Global Advisors. It has amassed assets over $13.77 billion, making it the largest ETF attempting to match the performance of the Consumer Discretionary - Broad segment of the equity market. XLY seeks to match the performance of the Consumer Discretionary Select Sector Index before fees and expenses.
The Consumer Discretionary Select Sector Index seeks to provide an effective representation of the consumer discretionary sector of the S&P 500 Index.
Costs
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are the same.
Annual operating expenses for this ETF are 0.10%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 0.90%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. 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 100% of the portfolio.
Looking at individual holdings, Amazon.com Inc. (AMZN - Free Report) accounts for about 17.87% of total assets, followed by Tesla Inc (TSLA - Free Report) and Home Depot Inc. (HD - Free Report) .
The top 10 holdings account for about 65.84% of total assets under management.
Performance and Risk
So far this year, XLY has added roughly 10.72%, and is down about -11.77% in the last one year (as of 03/09/2023). During this past 52-week period, the fund has traded between $126.26 and $191.53.
The ETF has a beta of 1.18 and standard deviation of 29.66% for the trailing three-year period, making it a medium risk choice in the space. With about 58 holdings, it effectively diversifies company-specific risk.
Alternatives
Consumer Discretionary Select Sector SPDR ETF holds a Zacks ETF Rank of 1 (Strong Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, XLY is an excellent option for investors seeking exposure to the Consumer Discretionary ETFs segment of the market. There are other additional ETFs in the space that investors could consider as well.
Fidelity MSCI Consumer Discretionary Index ETF (FDIS - Free Report) tracks MSCI USA IMI Consumer Discretionary Index and the Vanguard Consumer Discretionary ETF (VCR - Free Report) tracks MSCI US Investable Market Consumer Discretionary 25/50 Index. Fidelity MSCI Consumer Discretionary Index ETF has $1.02 billion in assets, Vanguard Consumer Discretionary ETF has $4.07 billion. FDIS has an expense ratio of 0.08% and VCR charges 0.10%.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.