For investors seeking momentum, Invesco DWA Consumer Staples Momentum ETF (PSL - Free Report) is probably on radar now. The fund just hit a 52-week high and is up about 21.5% from its 52-week low price of $62.13/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
PSL focuses on the consumer staples segment of the U.S. market. It provides exposure to stocks having positive relative strength (momentum) characteristics by tracking the DWA Consumer Staples Technical Leaders Index. The fund has key holdings in food products, diversified consumer services, household products and beverages. It charges investors 60 basis points a year in fees (see: all the Consumer Staples ETFs here).
Why the Move?
The consumer staples sector has been an area to watch out for lately given the volatility in the stock market triggered by U.S.-China trade worries and global growth concerns. This is because the consumer staples sector sees steady demand in the event of an economic downturn due to its low level of correlation with economic cycles. Additionally, increased hopes of monetary easing globally act as catalysts for the sector as lower rates increase consumer spending power on a wide range of products. All these factors make the consumer segment a great place to stay invested in.
More Gains Ahead?
Currently, PSL has a Zacks ETF Rank #4 (Sell) with a Medium risk outlook, suggesting that the fund might not continue its outperformance in the months ahead. However, many of the segments that make up this ETF have a strong Zacks Industry Rank, so there is definitely still some promise for those who want to ride on this surging ETF a little longer.
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