Betting on the Consumer in 2017

Rivals to XLY include the Vanguard Consumer Discretionary (NYSEArca: VCR) and Fidelity MSCI Consumer Discretionary Index (NYSEArca: FDIS).

The Consumer Confidence Index showed a 98.6 reading this month, reflecting a dip in consumers’ assessment of current business conditions and employment prospects, after rising in September to 103.5, its highest reading since January 2015, the Associated Press reports.

Starbucks and Nike are top 10 holdings in XLY. Nike is one of several Dow components found among the top 10 holdings cap-weighted discretionary ETFs. Unfortunately, the Dow’s discretionary stocks are among its worst-performing members this year.

If not for the contributions of high-flying Amazon (NASDAQ: AMZN), usually the largest holding in traditional discretionary ETFs, XLY and rival discretionary ETFs would be sporting even more tepid performances this year.

Regarding Amazon, “the recent retracement toward the support of the 200-day moving average near $727.28 is providing one of the best risk/reward ratios of 2016 and could be an ideal time to position oneself for a continued move higher in 2017,” reports Investopedia.

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