For investors seeking momentum, Consumer Staples Select Sector SPDR Fund (XLP - Free Report) is probably on radar now. The fund just hit a 52-week high and is up roughly 8% from its 52-week low price of $48.76/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:
XLP in Focus
XLP focuses on the consumer staples segment of the U.S. market. The fund has a large-cap focus with key holdings in the beverages, household products, food & staples retailing and food products segments. XLP charges investors 13 basis points a year in fees and has top holdings in Procter & Gamble (PG - Free Report) , Coca-Cola (KO - Free Report) and PepsiCo (PEP - Free Report) (see: all the Consumer Staples ETFs here).
Why the Move?
The consumer staples sector has been an area to watch lately given the risk-off sentiments. The bitter exchange of tit-for-tat tariff threats has sparked fears of global recession, thereby raising the appeal for consumer staples stocks. This is because the sector generally acts as a safe haven amid political and economic turmoil. Stocks in these sectors generally outperform during periods of low growth and high uncertainty.
More Gains Ahead?
Currently, XLP has a Zacks ETF Rank #5 (Strong Sell) with a Medium risk outlook, suggesting that outperformance could stall in the months ahead. However, many of the segments that make up this ETF have a strong Zacks Industry Rank, so there is definitely some promise for those who want to ride this surging ETF a little further.
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