Among the sectors of the economy I think will continue to do well despite the significant near-term uncertainty we all face today, consumer staples continue to remain an excellent choice for long-term investors looking for a place to stay invested while waiting out the current volatility we are now seeing.
In this article, I am going to discuss one exchange-traded fund (ETF) tracking this sector I believe is a great pick for now as well as the long-term.
The SPDR Consumer Staples Sector ETF (NASDAQ:XLP) is a U.S.–based ETF tracking a wide range of companies engaged in the manufacture, distribution, and retail of consumer staples products.
As such, this ETF provides broad economic exposure and is incredibly well-diversified across a number of lines of business one might not immediately include in the consumer staples bucket.
For example, approximately one-quarter of the fund’s holdings are concentrated in Amazon.com, Inc. (NASDAQ:AMZN) shares. This factor has driven excellent performance in this ETF compared to its peers of late.
I expect this outperformance to continue over the near-term. I think the market shakeout we are likely to see in the coming quarters will affect the broad grouping of companies held in this ETF to a far lesser degree.
This ETF is a great, boring, defensive place for investors concerned about these volatile times.
Invest wisely, my friends.
