With the holiday shopping season close to being over, investors could take that opportunity to take new approaches to consumer cyclical stocks.
“With the key holiday period largely behind us, we think investors will be reassessing companies’ competitive positioning and their individual abilities to capture incremental operating margin,” said Morningstar. With much operating leverage already squeezed from consumer businesses, improved operating efficiency will largely stem from capitalizing on a better customer experience, which could come from faster delivery times, speedier product innovation cycles, and a more individualized, experiential environment.”
Rivals to XLY include the Vanguard Consumer Discretionary (NYSEArca: VCR) and Fidelity MSCI Consumer Discretionary Index (NYSEArca: FDIS).
For more information on the consumer sector, visit our consumer discretionary category.