XLY: Consumer Plays Still Aren't My Preferred Idea

Summary The Consumer Discretionary Select Sector SPDR ETF remains a 'hold' due to persistent underperformance versus the S&P 500. I use the S&P 500 as my benchmark and expect XLY to continue lagging broader market returns. Inflation is a key risk, pressuring both companies and households, making the sector less attractive for new capital. Given these headwinds, I see no compelling reason to upgrade XLY from a neutral stance at this time. This idea was discussed in more depth with members of my private investing community, CEF/ETF Income Laboratory. Learn More » nicoletaionescu/iStock via Getty Images Main Thesis and Background The purpose of this article is to evaluate the Consumer Discretionary Select Sector SPDR ETF ( XLY ) as an investment option at its current market price. This is a fund that This article was written by The Worker's Advocate 9.74K Followers Follow I have worked in Financial Services for over 15 years. I have a Bachelors in Finance, where I was a scholarship Division 1 athlete (tennis). After working in NY for three years, I relocated to North Carolina for my MBA and I am fortunate to split my time between Charlotte & Asheville.I keep my portfolio up-to-date and take pride in writing about funds, stocks, and sectors I actually invest in. I know my followers appreciate this approach.My strategy: Invest in quality, diversify, add at the right times, and focus on the long run. Chasing risk, trying to get "rich" quickly, or following advice you don't understand are all pitfalls I made. That experience was a great teacher and I hope to help others learn what I have along the way.Broad market: DIA, VOO, QQQM / TDIV, RSPSectors/Non-US: XLE / IXC; VPU; FEZ, SCHF, BBCA, FLGB, EWJ, EWYMetals: CEF, SGOL, SLV, XMEStocks: JPM, MCD, WMT, MAA, WMDebt: Municipal bonds from NCI also contribute to the investing group CEF/ETF Income Laboratory where I specialize in macro analysis. Features of CEF/ETF Income Laboratory include: managed income portfolios (targeting safe and reliable ~8% yields) making use of high-yield opportunities in the CEF and ETF fund space. These are geared toward both active and passive investors of all experience levels. The vast majority of holdings are also monthly-payers, for faster compounding and steady income streams. Other features include 24/7 chat, and trade alerts. Learn more. Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.