Consumer ETFs: Buyer Beware

By Paul Britt,

Shutterstock photo

Looking at the data, U.S. consumer spending was unchanged for July, while consumer confidence rose unexpectedly. To add another layer of complexity, personal income ticked higher in July.

So, Americans didn't spend the extra money they earned even as they grew more confident about the state of economy.

But whatever consumers say or do, investors are betting on the consumer sector. It has outperformed broad U.S. equities year-to-date, and flows to ETFs canvassing the sector have exceeded $600 million for 2012.

But picking the right ETF is anything but easy, as we'll see.

Just look at the year-to-date performance spread of the top four funds by assets.

The top-performing fund shown in dark blue, the iShares Dow Jones U.S. Consumer Services Index Fund (NYSEArca:IYC) has outpaced the laggard shown in light blue, the First Trust Consumer Discretionary AlphaDex Fund (NYSEArca:FXD) by more than 10 percentage points in just seven months.

Don't forget to check's ETF Data section.

Copyright ® 2012 IndexUniverse LLC . All Rights Reserved.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing ETFs
Referenced Stocks: FXD , IYC , SPY , VCR

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