One beneficiary of beginning of the month inflows is the sector concentrated ETF XLP (SPDR Consumer Staples Select Sector, Expense Ratio 0.14%, $9.4 billion in AUM).
More than $1 billion has entered the fund since December began, a significant amount considering that the asset base in the fund including these inflows is still a bit shy of $10 billion overall. Like the SPX itself, this fund is within shouting distance of another 52-week high at present levels and trading volume in the product has been elevated for much of the month of December thus far.
Notably only one of the top three holdings in XLP appears in the top fifteen weightings in the S&P 500, and this would be PG (12.37% weighting and the #1 weighted component in XLP, 1.10% weighting and the #13 weighted component in the SPX and linked ETFs). When we look at the top holdings of XLP we see some market cap leaders of yesteryear: #2) KO (9.46%), 3) PEP (8.98%), 4) PM (8.92%), 5) MO (7.39%), 6) WMT (5.38%), 7) COST (4.474%), 8) CVS (3.89%), 9) CL (3.54%), and 10) MDLZ (3.54%).
Yield-conscious portfolio managers have often traditionally looked at XLP and related ETFs as we note the fund’s Yield is currently 2.6% as compared to say 1.8% from SPY. Given the recent action in XLP, we also find ourselves monitoring competitors such as VDC (Vanguard Consumer Staples, Expense Ratio 0.10%, $3.8 billion in AUM), IYK (iShares U.S. Consumer Good, Expense Ratio 0.44%, $546 million in AUM) as well as the Small-Cap oriented PSCC (PowerShares S&P SmallCap Consumer Staples, Expense Ratio 0.29%, $55 million in AUM).
The Consumer Staples Select Sect. SPDR ETF (XLP) was trading at $56.46 per share on Monday afternoon, down $0.13 (-0.23%). Year-to-date, XLP has gained 10.61%, versus a 20.15% rise in the benchmark S&P 500 index during the same period.
Disclaimer: The content of this article is excerpted from a daily newsletter from Street One Financial. While ETF Daily News may edit the contents and add a relevant title to the piece, the author, Paul Weisbruch, does not endorse or recommend any issuer or security mentioned herein.
Paul Weisbruch is the VP of ETF/Options Sales and Trading at Street One Financial. Prior to joining the team at Street One, Paul served as the Director of RIA and Institutional ETF Sales at RevenueShares ETFs from December 2007 until November of 2009. Before RevenueShares, Paul was employed by Susquehanna International Group from 2000 until 2007 serving in roles including OTC/NYSE Institutional Block Trading, Nasdaq/OTC Market Making, ETF/Derivatives Intelligence and Strategy, Algorithmic Trading, as well as acting as the PHLX Floor Specialist in the ETFs, SPY and DIA.Paul has been actively involved in the ETF space from both a product and trading standpoint since 2000. Additionally, Paul has well forged relationships with national RIAs, institutional pension fund managers and consultants, mutual fund and hedge fund managers, and also the ETF media. Co-authoring the “S1F ETF Daily” since 2009, the daily piece has become a must for many portfolio managers in the ETF space, with segments regularly appearing in the likes of Barron’s, WSJ, and ETFTrends.com for instance.
He holds his Series 4 (Registered Options Principal), 6, 7, 55 (Equity Trader), 63, and 65 licenses. He graduated from the University of Pittsburgh (B.S. – Economics), graduating magna cum laude, and has an MBA from Villanova University.