Each day we hear about how consumers world-wide are tightening their belts and spending less. Even the rich have pulled back, not a surprise considering, according to the Economist, high-net-worth individuals have lost a quarter of their wealth. Consumer confidence, which we charted a few weeks back has improved but is still historically bleak.
Yet, provided that government doesn’t completely kill capitalism outright, this pullback in shopping won’t always be the case. For contrarian investors looking for a diversified way of playing the global consumer, a lesser-known ETF has collected many of the top names into one simple play.
SPDR S&P International Consumer Discretionary Sector ETF (IPD: 18.37, -0.78, -4.07%) holds, as you might imagine, brand-name companies whose products you probably come into contact with every day.
Approximately 20% of the fund is held in automotive stocks, and even though General Motors (GM: 1.69*, -0.17, -9.13%) and Chrysler might be going away, the car business certainly isn’t. Honda (HMC: 28.00*, -0.50, -1.75%) (4.15%) and Toyota (TM: 75.76*, -1.38, -1.78%) (10.03%) are large holdings, along with Germany’s Volkswagen Ag (VLKAY) (3.14%) and Daimler Ag (DAI: 31.74*, -2.92, -8.42%) (3.01%). These are companies likely to gain even more market share as U.S. manufacturers shrink. You might recall from an earlier column that even the president’s own Auto Task Force drives mostly foreign cars.
Full Story: http://www.smartmoney.com/Investing/ETFs/Yes-Virginia-the-Consumer-Really-Will-Shop-Again/