The Consumer Staples Select SPDR (NYSEArca: XLP) is staving off trade war news and hitting new highs, which could have consumer staples riding alongside its wave with strength in defensive equities over cyclical equities.
“Consumer Staples Select Sector SPDR Fund (NYSEARCA: XLP)’s share price reached a new 52-week high during mid-day trading on Wednesday,” a Trent Times report noted. “The stock traded as high as $62.40 and last traded at $62.27, with a volume of 90889 shares. The stock had previously closed at $62.04.”
In addition, XLP is attracting bullish interest from large investors who are boosting their existing holdings or adding the fund altogether.
“Institutional investors and hedge funds have recently bought and sold shares of the company,” the report added. “Advantage Investment Management LLC boosted its stake in Consumer Staples Select Sector SPDR Fund by 2.8% in the second quarter. Advantage Investment Management LLC now owns 31,531 shares of the exchange traded fund’s stock worth $1,831,000 after purchasing an additional 853 shares in the last quarter. Kanawha Capital Management LLC lifted its position in Consumer Staples Select Sector SPDR Fund by 4.8% during the 2nd quarter. Kanawha Capital Management LLC now owns 11,501 shares of the exchange traded fund’s stock worth $668,000 after buying an additional 525 shares in the last quarter. Janney Montgomery Scott LLC grew its holdings in Consumer Staples Select Sector SPDR Fund by 7.9% during the 2nd quarter. Janney Montgomery Scott LLC now owns 2,694,268 shares of the exchange traded fund’s stock worth $156,456,000 after acquiring an additional 198,128 shares during the last quarter.”
From a relative ETF standpoint, there could also be an angle to be had when looking at cyclical equities over defensive equities. Strength in consumer staples can translate into further strength for defensive equities as investors look to safer havens when the markets turn awry from more negative trade war news.
For investors looking for continued upside in U.S. cyclical sectors over defensive sectors, the Direxion MSCI Cyclicals Over Defensives ETF (NYSEArca: RWCD) offers them the ability to benefit not only from cyclical sectors potentially performing well, but from their outperformance compared to defensive sectors.
Conversely, if investors believe that U.S. defensive sectors will outperform cyclical sectors, the Direxion MSCI Defensives Over Cyclicals ETF (NYSEArca: RWDC) provides a means to not only see defensive sectors perform well, but a way to capitalize on their outperformance compared to cyclical sectors.
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