Staples ETFs can Damp Election Year Volatility

This year is an election year and that could mean increased volatility for equities as the November 8 election day nears. And if volatility rises, investors are likely to favor lower beta sectors, such as consumer staples, along with exchange trade funds such as the Consumer Staples Select SPDR (NYSEArca: XLP).

Consumer staples stocks and exchange traded funds (ETFs) can be considered resurgent following a trying 2015. Last year, staples ETFs had their hands full with rising rate-related issues.

Related: Sticking With Staples ETFs: Is it a Good Idea?

The defensive consumer staples sector has been one of the year’s best performing areas of the S&P 500 as investors turned to more conservative plays in a volatile market, reports Stephanie Yang for CNBC.

Additionally, the time is right to consider consumer staples ETFs.


The sustainable nature of the consumer staples sector could help investors weather a potential storm in the summer months.

Staples ETFs such as XLP, the largest consumer staples ETF on the market, and rivals, including the Vanguard Consumer Staples ETF (NYSEArca: VDC) and the Fidelity MSCI Consumer Staples Index ETF (NYSEArca: FSTA), could be investor favorites if polls show a highly competitive presidential election as the summer months drag along.