Las Vegas, USA – A monthly analysis series provides a comprehensive overview of key metrics in the consumer discretionary sector, focusing on top sector ETFs like XLY, FDIS, and VCR. These ETFs analyze the sector’s performance based on their largest holdings, offering valuable insights into market trends and potential investment opportunities.

The analysis includes a deep dive into fundamental ratios such as Earnings Yield (EY), Sales Yield (SY), Free Cash Flow Yield (FY), Return on Equity (ROE), and Gross Margin (GM) for various subsectors within the consumer discretionary space. By comparing these metrics to historical baselines, investors can assess the value and quality scores of different companies within the sector.

Value scores reflect the deviation of valuation ratios from their historical averages, providing a perspective on undervaluation or overvaluation relative to the baseline. Quality scores, on the other hand, assess how companies perform in terms of return on equity and gross margin compared to historical averages.

Recent data shows varying performance across subsectors, with services standing out as the most attractive in terms of undervaluation and quality scores. Retailing, on the other hand, lags behind with negative value scores but positive quality scores, indicating a mixed picture for investors in this segment.

In terms of total returns and risk-adjusted performance, XLY has outperformed the S&P 500 index since its inception but has lagged in performance over the last 12 months. Despite this, XLY remains a popular choice for investors seeking exposure to consumer cyclicals, offering a diversified portfolio with a focus on major industries like specialty retail, hotels, restaurants, and automobiles.

For investors looking to diversify further or reduce exposure to specific holdings like Amazon and Tesla, alternative ETFs like FDIS and VCR offer similar exposure with different weightings and expense ratios. Each ETF presents a unique opportunity for investors based on their risk tolerance and investment objectives.

The analysis also includes insights into a Dashboard List, highlighting top-performing companies within the sector based on value and quality metrics. This list is designed to help investors identify potential opportunities for outperformance and align their portfolio with companies showing strong fundamentals in the consumer discretionary space.