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Beyond XLY: Considering Consumer Discretionary ETFs

Michael Johnston — Mon, 30 Jan 2012 12:00:16 +0000

Though the year is still very young, 2012 has gotten off to a promising start for investors. Major stock indexes have generally climbed higher throughout the first few weeks thanks to a number of encouraging data releases and reduced anxiety over the potential fallout from the European debt crisis [see also Early ETF Stars of 2012]. The second half of last year saw a flight among investors to safer securities, including utilities and dividend stocks. But as expected volatility continues to drop and momentum continues to build, many are likely looking for opportunities to dial up exposure to risky assets that generally experience greater volatility on the upside as well. The consumer discretionary sector tends to be a high beta segment of the market that performs rather well when markets are showing strength. That connection is rather obvious; when consumer confidence–and spending–are on the rise, companies that provide entertainment, travel [...]

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Beyond XLY: Three Pure Play Consumer Discretionary ETFs

Michael Johnston — Tue, 02 Feb 2010 14:23:57 +0000

Through the eyes of an investors, the consumer sector of the global economy is generally split into two segments: consumer staples and consumer discretionaries. Consumer staples stocks generally include those that manufacture and sell goods that are vital components of most household budgets, such as food and non-durable household goods. Companies producing goods that are deemed to be more of a luxury spend are classified as consumer discretionary stocks. XLY Top Ten Holdings McDonalds 7.3% Walt Disney 6.1% Home Depot 5.1% Comcast 4.9% Amazon.com 4.5% Target 4.2% Ford Motor Company 3.9% Time Warner 3.5% Lowe’s 3.4% DirecTV 3.1% Total Top 10 46.0% Historically, investors looking for low beta have gravitated towards consumer staples, while those looking to make a leveraged play on the health of the broad overall economy have embraced the consumer discretionary sector. The Consumer Staples Select Sector SPDR Fund (XLY) has a beta of 1.11 relative to [...]

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iShares ETFs Closing?

Michael Johnston — Mon, 14 Dec 2009 15:00:52 +0000

BlackRock’s acquisition of Barclays Global Investors and iShares seemingly went off without a hitch earlier this month. But certain actions required by terms of the deal have proven difficult to wrap up, resulting in a dozen iShares funds now operating under interim investment advisory agreements and potentially closing down. As a result of the sale to BlackRock, the existing investment advisory agreements for iShares ETFs terminated on December 1, and approval of a new agreement requires shareholder action. According to iShares, investors have voted overwhelmingly to approve new agreements for 167 funds, but have received insufficient participation to do so for 12 ETFs: iShares MSCI Brazil Index Fund (EWZ) iShares MSCI EMU Index Fund (EZU) iShares MSCI Germany Index Fund (EWG) iShares MSCI Mexico Investable Market Index Fund (EWW) iShares S&P Europe 350 Index Fund (IEV) iShares S&P Global 100 Index Fund (IOO) iShares S&P Global Consumer Discretionary Sector Index [...]

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Size Does Matter (To a Point): Study of ETF Liquidity

Michael Johnston — Thu, 11 Jun 2009 07:00:36 +0000

As the ETF industry has exploded on to the scene in recent years, sponsors have aggressively launched funds in an attempt to gain market share. While many of these new ETFs have attracted sufficient investor funds to justify continued operation, some have failed to garner a level of investment necessary to support an active, liquid market and been shuttered. And then there are those that remain in business but are cited as having “insufficient liquidity.” Although there are certain rules of thumb – assets under management (AUM) of $25 million and daily volume of 25,000 are often cited as “liquidity thresholds” – there is no hard evidence to support these guidelines. In an effort to determine where illiquidity ends and an active market begins, I analyzed the impact of size and daily volume on the liquidity of various ETFs. To start, I divided ETFs into six baskets based on three-month average daily [...]

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Consumer Discretionary ETFs Surge on Confidence News

Michael Johnston — Tue, 26 May 2009 15:45:19 +0000

Consumer discretionary ETFs surged Tuesday morning on news that consumer confidence increased again in May to its highest level since September 2008. The Conference Board announced that its index of consumer confidence for May increased to 54.9 from 40.8 in April (originally reported at 39.2). Expectations for economic activity over the next six months jumped to 72.3 from 51.0 in the prior month. Following the report, ETFs focused on consumer discretionary indices surged, with State Street’s XLY, iShares’ RXI, and PowerShares’ PEZ all up more than 2%. The report largely offset disappointing results on home prices released earlier Tuesday morning, indicating that home prices continued to fall in 15 of the top 20 major metropolitan areas. Click here to read the original article on ETFdb.com.Related Posts:Beyond XLY: Considering Consumer Discretionary ETFsBeyond XLY: Three Pure Play Consumer Discretionary ETFsDaily ETF Roundup: XLY Surges On Jobs Report, VXX Tumbles 5% On Market [...]

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