“XLP holds a relatively small group of companies, but its returns have only been eclipsed by utility stocks in the S&P 500 Index so far this year. This ETF has gained nearly 7% in 2016 and just recently hit new all-time highs. Clearly investors are banking on the stability of low volatility stocks in this uncertain environment,” adds See It Market.
For an alternative index-based offering, investors can turn to the First Trust Consumer Staples AlphaDEX Fund (NYSEArca: FXG). FXG tracks a smart-beta AlphaDEX index that draws consumer staples from the Russell 1000 based on growth factors including three, six and 12-month price appreciation, sales to price and one year sales growth, and, separately, on value factors including book value to price, cash flow to price and return on assets.
Consumer Staples Select SPDR
Tom Lydon’s clients own shares of XLP.