SPDR Consumer Discretionary (XLY) is one of the largest SPDR sectors, comprising over 10% of the S&P 500.1 The cyclical sector is a variety of unrelated industries that provide luxuries, some entertainment, cars, shopping, and non-necessities bought ad hoc. XLY’s largest holders include Amazon (AMZN), Tesla (TSLA), Home Depot (HD), and Nike (NKE).
The fund includes a diverse range of industries, such as internet and direct marketing retail (25%); specialty retail (22%); hotels, restaurants, and leisure (19%); and automobiles (18%).2 XLY also includes smaller industries such as multiline retail (5%), household durables (3%), distributors (2%), auto components (1%), and leisure products (<0.5%).
XLY companies depend on the supply chain and their industry’s seasonal or ongoing demand. Specific industries may also be more capital-intensive than others, which may increase operating expenses and decrease taxes because of depreciation. Investing in the XLY ETF diversifies and lumps the investments together, alleviating some discrepancies among the industries.
First State Investment Advisors maintains a significant position in Starbucks (SBUX). We also invest the XLY ETF in client portfolios. Our Tulsa wealth managers can help you navigate the different industries within the sector and build a customized portfolio in a free consultation. All client portfolios conform to individual needs and goals, including retirement. To schedule a free consultation, contact us today at (918) 492-1361.
Sources
1Select Sector SPDRs Consumer Discretionary XLY (Accessed Feb 22, 2023)
2State Street Global Advisors XLK Consumer Discretionary Select Sector SPDR® Fund (Accessed Feb 22, 2023)
This overview is for informational purposes only and is not a recommendation. It should not be the sole deciding factor in making an investment. Investing is a risk and, as with all risks, a positive return is not guaranteed. Past performance does not indicate future results.