Rivals to XLY include the Vanguard Consumer Discretionary (NYSEArca: VCR) and Fidelity MSCI Consumer Discretionary Index (NYSEArca: FDIS). Both VCR and FDIS are cap-weighted funds featuring Amazon as their largest holding.
“Digging one level deeper, a few stocks have had outsized effects on the sector this year, with online retail giant Amazon being the most prominent. Home Depot and Comcast (parent company of NBCUniversal and CNBC) have also been big contributors,” according to CNBC.
Home Depot and Comcast are also major components in XLY, VCR and FDIS. Investors should note that the consumer discretionary sector, the fourth-largest sector weight in the S&P 500, is a cyclical group, meaning it is usually more volatile than the broader market.
“Consumer discretionary firms are more volatile than the broader market. During the past 10 years, this ETF has had a standard deviation of 18.3 percent compared with the S&P 500’s 15.3 percent,” noted Morningstar.
For more information on the consumer sector, visit our consumer discretionary category.