Consumer Discretionary

Why invest in Consumer Discretionary?

Consumer Discretionary sector consists of all companies that sell non-essential goods and services like  consumer durable , automobiles , luxury goods , hotels and restaurants etc.  The sector  experiences  growth when there  is higher  purchasing power in the hands of the consumer . Consumer Discretionary Sector performs well  when the economy is just emerging from a recession and is experiencing growth. On the other hand the sector is hardest hit when consumers pullback on spending on non-necessities in times of recession. Thus the companies involved in this sector tend to have periods of rapid growth and sharp declines.

As per GICS definition the Consumer Discretionary Sector is further broken into:

  • Manufacturing segment including automotive, household durable goods, leisure equipment and textiles & apparel. and
  • Services segment including hotels, restaurants and other leisure facilities, media production and services, and consumer retailing and services.

Key indicators  to consider before investing

Top 5 ETF’s  by Market Capitalization 

Name of the Fund Ticker Symbol /Total AUM* Year of Inception Expense Ratio
 Consumer Discretionary Select Sector SPDR   XLY  12/16/1998  0.14%
 Vanguard Consumer Discretionary   VCR  01/26/2000  0.10%
 First Trust Consumer Discretionary Alpha  FXD  05/08/2007  0.61%
 iShares Dow Jones US Consumer IYC  06/12/2000  0.44%
 SPDR S&P Retail  XRT  06/19/2006  0.35%

 

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