ETF Research and Analysis

by Robert Goldsborough
Consumer Staples Select Sector SPDR XLP provides exposure to a defensive sector. Investors interested in the U.S. consumer staples sector should be aware that the space generally produces relative outperformance during   Read more 

Bull Case

Companies held in this fund generally have stable revenue growth and cash flows.
We expect that one use for consumer staples firms' excess cash will be for smaller, bolt-on deals, which we view positively as they would offer potential acquisitors the opportunity to get a better handle on the local consumer without becoming steeply indebted.
Emerging markets continue to represent a longer-term growth opportunity for many of the fund's holdings. Read more 

Bear Case

The retailers held in this ETF operate in very competitive environments that can make margin expansion difficult.
Higher interest rates could pressure some of the firms held in this ETF as investors revise upward their required rates of return.
A stronger dollar is hurting some of the firms held in this ETF that have significant foreign revenue. Read more 

Why Index Construction Matters for ETF Investors 
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