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Consumer Staples ETF (PSL) Hits New 52-Week High

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For investors seeking momentum, PowerShares DWA Consumer Staples Momentum Portfolio (PSL - Free Report) is probably on radar now. The fund just hit a 52-week high and is up nearly 20.2% from its 52-week low price of $58.07/share.

But are more gains in store for this ETF? Let’s take a quick look at the fund and the near-term outlook on it to get a better idea on where it might be headed.

PSL in Focus

This 35-stock fund looks to track the DWA Consumer Staples Technical Leaders Index. The expense ratio of the fund is 0.60%. Constellation BrandsChurch & Dwight Co and Herbalife are the top three companies of the fund (see all Consumer Staples ETFs here).

Why the Move?

Consumer staples sector fared better in March retail sales. Sales rose at grocery stores, restaurants and bars, and drug stores. Food & beverage stores (0.2%, the same clip as in February) and health & personal care stores (1.4% versus -1.1%) were some of the categories that drove the staples sector sales in March. 

According to Wall Street Journal, the wider trend in consumer spending hints at moderate growth despite an uptick in worker paychecks. If this is the situation of consumers’ spending pattern, they would probably buy more staples than discretionary items. Plus, ongoing geopolitical tensions related to Russia, Syria and China are probably leading investors to this safe sector.

More Gains Ahead? 

Currently, PSL has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook. Therefore, it is hard to get a handle on its future returns one way or the other. However, the fund has a positive weighted alpha of 20.00. So, there is still some promise for investors who want to ride on this surging ETF.

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