Exchange traded funds that track consumer staples and utilities stocks are among the best sellers in ETFs this year, and their outperformance has rewarded investors who looked for safety in the defensive sectors.
Utilities Select Sector SPDR (NYSEArca: XLU) and Consumer Staples Select Sector SPDR (NYSEArca: XLP) have raked in $2.6 billion and $2.3 billion of inflows year to date through October, respectively, according to data from the National Stock Exchange.
The funds are among the top 10 ETFs in 2011 in terms of net cash inflows.
The utilities sector fund is up 15.6% so far this year, compared with a 2% advance for the S&P 500, according to Morningstar. The consumer staples ETF has gained 8.8%.
Consumer staples ETFs are less sensitive to economic cycles, hence the “toilet paper and beer” trade. [Playing Defense with Consumer Staples ETFs]
Meanwhile, utilities are trouncing the overall market this year as investors assign a premium to defensive stocks and dividends. [Utilities ETFs Outperform on Safety Trade, Dividends]
Utilities Select Sector SPDR
The opinions and forecasts expressed herein are solely those of John Spence, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.