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, which is up roughly 28.6% from its 52-week low price of $48.33/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
The underlying the Consumer Staples Select Sector Index seeks to provide an effective representation of the consumer staples sector of the S&P 500 Index. It charges 13 bps in fees (see all Consumer Staples ETFs here).
Why the Move?
The consumer staples sector has been an area to watch lately given Wal-Mart’s outperformance at the start of Holiday season shopping. The sector performs well in a low-rate environment which the U.S. economy has been witnessing currently. Also, trade tensions between the United States and China is not over yet, 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?
The fund has a Zacks Rank #1 (Strong Buy). It also has a positive weighted alpha of 14.60, which hints at more gains. So, there is definitely still some promise for those who want to ride on this ETF a little longer.
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