Consumer ETFs Allure as Investors Play Defense

However, with investors playing defense, XLP and rival ETFs have new found allure.

“If you look at the bigger picture, XLP has appreciated 87.47% since its inception on Dec. 16, 1998. Think about that inception date for a minute. This means that XLP has delivered a gain to investors despite the Tech Bubble, 9/11, and the Financial Crisis. What makes XLP even more intriguing as a low expense ratio of 0.14% — the average ETF expense ratio is 0.46%,” reports Investopedia.

The First Trust Consumer Staples AlphaDEX Fund (NYSEArca: FXG) is another way of playing the staples sector. FXG uses a different type of strategic beta approach to staples stocks.

Another way of looking at FXG is that the ETF has benefited from the long-standing out-performance of mid-caps relative to broader U.S. indices. By not being heavily allocated to the most popular staples names, such as Procter & Gamble and Coca-Cola (NYSE: KO), FXG is able to offer more of a growth feel to a sector more associated with defense, not growth. [Super Staples ETFs]

Consumer Staples Sector SPDR

Tom Lydon’s clients own shares of FXG.