February and March are also good times to own retail names because that is when fourth-quarter earnings reports from those companies start rolling in.
In terms of ETFs, S&P Capital IQ has overweight ratings on XLY and the iShares U.S. Consumer Services ETF (NYSEArca: IYC). Although IYC is smaller than XLY, the iShares offering has impressed this year with a 34.3% gain. IYC has somewhat of a staples feel to it as Wal-Mart (NYSE: WMT) and CVS Caremark (NYSE: CVS) are found among the ETF’s top-10 holdings.
However, so are Amazon (NasdaqGM: AMZN), Walt Disney (NYSE: DIS) and eBay (NasdaqGM: EBAY). XLY is also home to those stocks. Overall, seven stocks appear in the top-10 holdings of both ETFs. IYC’s top-10 lineup represents 38% of its weight while XLY’s top-10 holdings combine for 46% of that ETF’s weight.
Consumer Discretionary Select Sector SPDR
Tom Lydon’s clients own shares of Amazon.