For investors seeking momentum, iShares Global Consumer Staples ETF (KXI - Free Report) ) is probably on radar. The fund just hit a 52-week high and is up about 22.7% from its 52-week low price of $44.30/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:
KXI in Focus
The fund follows the S&P Global 1200 Consumer Staples Sector Capped Index. It holds about 90 securities in the portfolio. However, the fund has moderate company-specific concentration risks with the top three holdings taking about 23%. KXI is heavy on the United States and United Kingdom. The product charges 47 bps in fees (see all Consumer Staples ETFs here).
Why the Move?
The ECB and the Fed are mulling over possible stimulus measures this year. Easy money polices across the globe have resulted in lower interest rates and have gone a long way in boosting rate-sensitive consumer staples stocks. Also, global growth worries and geopolitical tensions have contributed positively to the safe-haven appeal of the sector.
Meanwhile, Eurozone consumer confidence recoiled in July thanks to “low inflation, improving wages and declining unemployment.” The U.S. economy also reported solid growth in consumer spending in the second quarter. Both factors have acted in favor of consumer stocks.
More Gains Ahead?
If the ECB and the Fed come up with a market-boosting message or rate cut announcement, there could be a rally in the fund.
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