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5 ETFs to Ride on Soaring 2-Year High Consumer Sentiment
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Americans are feeling optimistic about the U.S. economy, buoyed by easing inflation and a strong job market. This is especially true as consumer sentiment soared this month to the highest level in almost two years. Rising consumer sentiment bodes well for household spending in the coming months. It is expected to have a positive impact on the consumer discretionary sector, which attracts a major portion of consumer spending.
As such, investors could tap the encouraging trend in the basket form through consumer discretionary ETFs like Consumer Discretionary Select Sector SPDR Fund (XLY - Free Report) , Vanguard Consumer Discretionary ETF (VCR - Free Report) , Fidelity MSCI Consumer Discretionary Index ETF (FDIS - Free Report) , Invesco S&P SmallCap Consumer Discretionary ETF (PSCD - Free Report) and SPDR S&P Retail ETF (XRT - Free Report) . These funds have a Zacks ETF Rank #1 (Strong Buy) or 2 (Buy), suggesting their outperformance in the months ahead.
The preliminary University of Michigan Index of Consumer Sentiment soared 12.7% in July from a 72.6 reading in June. This marks the highest level since September 2021. The rise was broad-based, with a 19% rise in long-term business conditions and a 16% increase in short-run business conditions. Additionally, the recent decline in gas prices and rise in stock prices are boosting consumers’ confidence.
The U.S. economy has shown resilience in the face of the Fed’s aggressive monetary policy tightening. Economic activity continued to expand at a modest pace, with robust job gains, a low unemployment rate and moderated inflation. Consumer confidence unexpectedly jumped to an 18-month high in June amid lingering fears of a recession. The U.S. housing sector has also shown immense improvement, with homebuilder confidence reaching its highest level in almost a year. Although the Fed has raised rates this year, interest rates have largely remained low (read: Markets Anticipate Peaking Fed Rate Hikes: Growth ETFs to Gain).
Consumer Discretionary Select Sector SPDR Fund (XLY - Free Report)
Consumer Discretionary Select Sector SPDR Fund offers exposure to the broad consumer discretionary space and tracks the Consumer Discretionary Select Sector Index. It holds 53 securities in its basket, with key holdings in automobiles, broadline retail, specialty retail, hotels, restaurants and leisure, and specialty retail with a double-digit allocation each.
Consumer Discretionary Select Sector SPDR Fund is the largest and most popular product in this space, with AUM of $17.5 billion and an average daily volume of around 5 million shares. It charges 0.10% in expense ratio and has a Zacks ETF Rank #1 with a Medium risk outlook.
Vanguard Consumer Discretionary ETF follows the MSCI U.S. Investable Market Consumer Discretionary 25/50 Index and holds 308 stocks in its basket. In terms of industrial exposure, broadline retail, automobile manufacturers and restaurants occupy the top three spots.
Vanguard Consumer Discretionary ETF is the low-cost choice in the space, charging investors only 10 bps in annual fees while volume is good at nearly 68,000 shares a day. The fund has managed $5 billion in its asset base so far. Vanguard Consumer Discretionary ETF has a Zacks ETF Rank #1 with a Medium risk outlook.
Fidelity MSCI Consumer Discretionary Index ETF (FDIS - Free Report)
Fidelity MSCI Consumer Discretionary Index ETF tracks the MSCI USA IMI Consumer Discretionary Index, holding 295 stocks in its basket.
Fidelity MSCI Consumer Discretionary Index ETF has amassed $1.3 billion in its asset base while trading in a good volume of around 65,000 shares a day on average. It charges 8 bps in annual fees from investors and has a Zacks ETF Rank #2 with a Medium risk outlook (read: ETFs in Focus on Tesla's 128% YTD Jump, Will the Rally Last?).
Invesco S&P SmallCap Consumer Discretionary ETF targets the small-cap segment of the broad consumer discretionary space by tracking the S&P SmallCap 600 Capped Consumer Discretionary Index. It holds 82 securities in its basket, with specialty retail taking the largest share at 32%, while household durables, and hotels, restaurants and leisure account for double-digit exposure each.
Invesco S&P SmallCap Consumer Discretionary ETF has attracted $28.1 million in AUM and charges 30 bps in annual fees. It trades in an average daily volume of about 2,000 shares and has a Zacks ETF Rank #2 with a High risk outlook.
SPDR S&P Retail ETF tracks the S&P Retail Select Industry Index, which provides exposure across large, mid- and small-cap retail stocks. It holds well-diversified 80 stocks in its basket. SPDR S&P Retail ETF is well spread across various industries with a double-digit allocation each in automotive retail, specialty stores, apparel retail and broadline retail (read: 5 ETFs to Gain as Inflation Drops to a 2-Year Low).
SPDR S&P Retail ETF is the largest and most popular in the retail space, with AUM of $404.5 million and an average trading volume of 5.5 million shares. It charges 35 bps in annual fees and has a Zacks ETF Rank #2 with a Medium risk outlook.
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5 ETFs to Ride on Soaring 2-Year High Consumer Sentiment
Americans are feeling optimistic about the U.S. economy, buoyed by easing inflation and a strong job market. This is especially true as consumer sentiment soared this month to the highest level in almost two years. Rising consumer sentiment bodes well for household spending in the coming months. It is expected to have a positive impact on the consumer discretionary sector, which attracts a major portion of consumer spending.
As such, investors could tap the encouraging trend in the basket form through consumer discretionary ETFs like Consumer Discretionary Select Sector SPDR Fund (XLY - Free Report) , Vanguard Consumer Discretionary ETF (VCR - Free Report) , Fidelity MSCI Consumer Discretionary Index ETF (FDIS - Free Report) , Invesco S&P SmallCap Consumer Discretionary ETF (PSCD - Free Report) and SPDR S&P Retail ETF (XRT - Free Report) . These funds have a Zacks ETF Rank #1 (Strong Buy) or 2 (Buy), suggesting their outperformance in the months ahead.
The preliminary University of Michigan Index of Consumer Sentiment soared 12.7% in July from a 72.6 reading in June. This marks the highest level since September 2021. The rise was broad-based, with a 19% rise in long-term business conditions and a 16% increase in short-run business conditions. Additionally, the recent decline in gas prices and rise in stock prices are boosting consumers’ confidence.
The U.S. economy has shown resilience in the face of the Fed’s aggressive monetary policy tightening. Economic activity continued to expand at a modest pace, with robust job gains, a low unemployment rate and moderated inflation. Consumer confidence unexpectedly jumped to an 18-month high in June amid lingering fears of a recession. The U.S. housing sector has also shown immense improvement, with homebuilder confidence reaching its highest level in almost a year. Although the Fed has raised rates this year, interest rates have largely remained low (read: Markets Anticipate Peaking Fed Rate Hikes: Growth ETFs to Gain).
Consumer Discretionary Select Sector SPDR Fund (XLY - Free Report)
Consumer Discretionary Select Sector SPDR Fund offers exposure to the broad consumer discretionary space and tracks the Consumer Discretionary Select Sector Index. It holds 53 securities in its basket, with key holdings in automobiles, broadline retail, specialty retail, hotels, restaurants and leisure, and specialty retail with a double-digit allocation each.
Consumer Discretionary Select Sector SPDR Fund is the largest and most popular product in this space, with AUM of $17.5 billion and an average daily volume of around 5 million shares. It charges 0.10% in expense ratio and has a Zacks ETF Rank #1 with a Medium risk outlook.
Vanguard Consumer Discretionary ETF (VCR - Free Report)
Vanguard Consumer Discretionary ETF follows the MSCI U.S. Investable Market Consumer Discretionary 25/50 Index and holds 308 stocks in its basket. In terms of industrial exposure, broadline retail, automobile manufacturers and restaurants occupy the top three spots.
Vanguard Consumer Discretionary ETF is the low-cost choice in the space, charging investors only 10 bps in annual fees while volume is good at nearly 68,000 shares a day. The fund has managed $5 billion in its asset base so far. Vanguard Consumer Discretionary ETF has a Zacks ETF Rank #1 with a Medium risk outlook.
Fidelity MSCI Consumer Discretionary Index ETF (FDIS - Free Report)
Fidelity MSCI Consumer Discretionary Index ETF tracks the MSCI USA IMI Consumer Discretionary Index, holding 295 stocks in its basket.
Fidelity MSCI Consumer Discretionary Index ETF has amassed $1.3 billion in its asset base while trading in a good volume of around 65,000 shares a day on average. It charges 8 bps in annual fees from investors and has a Zacks ETF Rank #2 with a Medium risk outlook (read: ETFs in Focus on Tesla's 128% YTD Jump, Will the Rally Last?).
Invesco S&P SmallCap Consumer Discretionary ETF (PSCD - Free Report)
Invesco S&P SmallCap Consumer Discretionary ETF targets the small-cap segment of the broad consumer discretionary space by tracking the S&P SmallCap 600 Capped Consumer Discretionary Index. It holds 82 securities in its basket, with specialty retail taking the largest share at 32%, while household durables, and hotels, restaurants and leisure account for double-digit exposure each.
Invesco S&P SmallCap Consumer Discretionary ETF has attracted $28.1 million in AUM and charges 30 bps in annual fees. It trades in an average daily volume of about 2,000 shares and has a Zacks ETF Rank #2 with a High risk outlook.
SPDR S&P Retail ETF (XRT - Free Report)
SPDR S&P Retail ETF tracks the S&P Retail Select Industry Index, which provides exposure across large, mid- and small-cap retail stocks. It holds well-diversified 80 stocks in its basket. SPDR S&P Retail ETF is well spread across various industries with a double-digit allocation each in automotive retail, specialty stores, apparel retail and broadline retail (read: 5 ETFs to Gain as Inflation Drops to a 2-Year Low).
SPDR S&P Retail ETF is the largest and most popular in the retail space, with AUM of $404.5 million and an average trading volume of 5.5 million shares. It charges 35 bps in annual fees and has a Zacks ETF Rank #2 with a Medium risk outlook.