Can Investor Enthusiasm for Consumer Staples Continue?

Amid the coronavirus pandemic, consumer staples is one of the piping hot sectors as the need for must-have goods isn’t likely to wane even with stay-at-home orders enforced. One of the companies to keep an eye on is Procter & Gamble, as well as the exchange-traded funds (ETFs) that have heavy holdings of the consumer staples giant.

“Procter & Gamble (NYSE: PG) has become a hot stock to watch in recent weeks,” a Motley Fool article published on Nasdaq. “The changes in consumer behavior brought about by the COVID-19 pandemic have sparked renewed interest in many of the consumer staples for which the company has become known.”

“Now, with earnings season having just begun, many investors will likely look for any glimpse of how this crisis affects earnings,” the article added. “As some consumer staples saw a surge in sales, these companies can buck the trend of economic decline with widespread store closures and millions of people out of work. However, Procter & Gamble’s earnings may at best offer a limited view of what will come for investors.”

Investors looking to get in on consumer staples can look at these funds with Procter & Gamble exposure:

  • Fidelity MSCI Consumer Staples Index ETF (FSTA): seeks to provide investment returns that correspond, before fees and expenses, generally to the performance of the MSCI USA IMI Consumer Staples Index. The fund invests at least 80% of assets in securities included in the fund’s underlying index. The fund’s underlying index is the MSCI USA IMI Consumer Staples Index, which represents the performance of the consumer staples sector in the U.S. equity market. It may or may not hold all of the securities in the MSCI USA IMI Consumer Staples Index.
  • Vanguard Consumer Staples Index Fund ETF Shares (VDC): seeks to track the performance of a benchmark index. The fund employs an indexing investment approach designed to track the performance of the MSCI US Investable Market Index/Consumer Staples 25/50, an index made up of stocks of large, mid-size, and small U.S. companies within the consumer staples sector, as classified under the Global Industry Classification Standard. The Advisor attempts to replicate the target index by seeking to invest all, or substantially all, of its assets in the stocks that make up the index, in order to hold each stock in approximately the same proportion as its weighting in the index.

Bullish leveraged option traders can use is the Direxion Daily Consumer Discretionary Bull 3X ETF (NYSEArca: WANT). WANT seeks daily investment results equaling 300 percent of the daily performance of the Consumer Discretionary Select Sector Index.

WANT jumped 5.41% during Wednesday’s trading session, which saw equities overall move higher with the Dow Jones Industrial Average up over 450 points.

WANT Chart

WANT data by YCharts

For more market trends, visit ETF Trends.