Consumer Discretionary ETFs Could Underperform in Late Business Cycle

For instance, Starbucks Corp. executives singled out the very uncertain election, domestic civil unrest with regard to race and terrorism as a few factors that have weighed on normal spending. McDonald’s Corp. leadership also argued that the uncertainty in consumers’ minds have destabilized their sense of financial security ahead, and when people are uncertain, they keep a tighter grip on their wallets.

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So far, the consumer discretionary sector remains one of the worst performing areas of the market and it is still falling short of the broader S&P 500 index.

Year-to-date, the Consumer Discretionary Select Sector SPDR (NYSEArca: XLY) gained 5.7%, Vanguard Consumer Discretionary (NYSEArca: VCR) rose 5.6% and Fidelity MSCI Consumer Discretionary Index (NYSEArca: FDIS) increased 5.5%. In contrast, the S&P 500 is 8.3% higher so far this year.

For more information on the consumer sector, visit our consumer discretionary category.

Consumer Discretionary Select Sector SPDR