There is an important caveat regarding XLP’s March performances. CXO points out that from 1999 through 2012, the largest staples ETF did generate an average gain of just over 1% in the third month of the year. Additionally, XLP returned an impressive 4% in March 2013 and is up 4.1% since the start of this month.
A poor start to 2014 for staples stocks has prompted investors to pull $1.22 billion from XLP and with corn, grain and sugar prices on the rise, some may be prepping for a disappointing batch of first-quarter earnings updates out of the major holdings in staples ETFs, indicating the current rally could be short-lived. [Commodities ETF Looks to Rally]
Consumer Staples Select Sector SPDR
Tom Lydon’s clients own shares of Coca-Cola and Procter & Gamble.