VCR “seeks to track the performance of the MSCI U.S. Investable Market Index (IMI)/Consumer Discretionary 25/50, its benchmark index. Its investment objective is to employ a fully replicating approach. Since the fund implements that approach, it has an extremely low tracking error of 0.05. VCR invests nearly all of its assets in common stocks comprising the index, with the same allocation as the weighting in the index,” according to Investopedia.
Other factors are at play for discretionary ETFs, including rising wages and the higher minimum wage. including the rising minimum wage. Meanwhile, a growing segment of America is calling for higher minimum wages across the government after years of stalled efforts. The national minimum wage has been set at $7.25 per hour since 2009, and changes would require the support of the Republican-controlled Congress.
A number of research has pointed to improved economic conditions from higher wages. For instance, in a 2011 study by the Chicago Federal Reserve, the author found that for ever dollar increase in minimum wage, a worker’s household added $2,800 in new consumer spending over the following year.
VCR “has a P/E ratio of 22.1, which is higher than that of the iShares U.S. Consumer Services ETF. Its P/B ratio of 4.3 is in line with that of the iShares U.S. Consumer Services ETF. The Vanguard Consumer Discretionary ETF’s top five holdings are identical to those of the iShares U.S. Consumer Services ETF,” according to Investopedia.
Vanguard Consumer Discretionary
