Consumer ETFs Continue to Benefit from Economic Recovery

Joel Anderson  |

There were a record number of new ETFs in 2011, a fact that has left a myriad of different possibilities for any investor looking to make broad based bets on market trends. While there's always the SPDR S&P 500 (SPY) for those investors looking in investing in something as simple as whether or not the S&P 500 is on the rise or not, there are any number of more specific and intriguing plays available to through ETFs in today's market.

With the economy appearing to be in recovery as stronger than expected jobs numbers keep coming in each month, some investors might be inclined to bet on improved consumer spending. If the economy is in recovery, one sector that should stand to benefit the most is consumer discretionary. More jobs and increased income should mean increased disposable income for a great many Americans, and that could mean that the consumer discretionary sector on the whole, could be on the rise. So, for those investors interested in ways to play on the consumer goods market in the United States, here are some options.

Global X Auto ETF (VROM)

With GM (GM), Ford (F), and Chrysler (FIATY) posting excellent years in 2011, one might be inclined to bet on the continued return of the American auto industry. If the economy continues to improve, and if that translates to continued bullish auto sales, the Auto ETF could be a wise buy.

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Market Vectors Gaming ETF (BJK)

There may be no more frivolous method of spending money than gambling, particularly on the sort of table games casinos offer that have built in mathematical advantages for the house. If people start seeing improved financial situations, they may be more inclined to make that trip to Las Vegas to blow their new-found disposable income.

Dynamic Leisure & Entertainment Portfolio (PEJ)

While less specific than the gaming ETF, the Dynamic Leisure & Entertainment Portfolio is another way to bet on Americans spending more on the frivolous. With a number of holding in those stocks dependent on leisure spending, it's entirely possible that an economic rebound would mean improving outlooks for this ETF.

SPDR S&P Retail (XRT)

With an average  volume exceeding 6 million shares, the SPDR Retail ETF is one of the most popular of this group. The average American shopper, potentially flush with cash once again, could be poised to make a bolt to their favorite store. If so, the SPDR retail ETF might be one way to bet on the improved economy.

Consumer Discretionary SPDR (XLY)

While less specific than the others, some investors might feel like being boring and just making a broad bet on the entire sector. If so, the SPDR Consumer Discretionary SPDR is a popular pick to capitalize.

Consumer Discretionary ETFs

The continued recovery of the American economy is no certainty, and, even if it does continue, there's no guarantee that consumer discretionary stocks will be the ones to benefit. However, for any investor who believes the economy will keep gaining ground and that the consequence of this will be seen in consumer discretionary stocks, ETFs may be an easy way to make broad bets without the risk of investing in any individual company.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not necessarily represent the views of Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to:


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