After faltering to start the year, Consumer Discretionary Select Sector SPDR (NYSEArca: XLY), the largest consumer discretionary exchange traded fund, is sporting a year-to-date gain of more than 1% and some traders see more near-term upside for XLY and the consumer discretionary sector.
XLY, the largest consumer discretionary ETF by assets, includes exposure to retail firms, restaurants, media companies, apparel and luxury goods companies, automobile manufacturers and leisure industries.
Retailers make up a large portion of the underlying holdings. E-commerce and greater mobile commerce usage has also been a big game changer in the industry, especially with more consumers using online sources like Amazon, which XLY holds.
Speaking of Amazon.com (NasdaqGS: AMZN), a major component in XLY, that is one of the stocks that will need to contribute in order for XLY to make new highs. The VanEck Vectors Retail ETF (NYSEArca: RTH) holds one of the largest Amazon stakes among all ETFs.
RTH covers the 25 largest U.S. companies involved in retail distribution, wholesalers, on-line, direct mail and TV retailers, multi-line retailers, specialty retailers and food and other staples retailers. Top components include Amazon (NasdaqGS: AMZN), Home Depot (NYSE: HD) and Wal-Mart (NYSE: WMT).
“The XLY has been bolstered by its bigger holdings’ upswings, including Amazon and McDonald’s, both of which exceeded earnings forecasts and are some of the market’s best performing stocks. Andrew Keene of AlphaShark believes that longer-term trends also suggest that the XLY will keep moving up,” reports CNBC.[related_stories]