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3 Sector Funds to Pile Into Now

These ETFs and mutual funds are poised to outperform as we enter the home stretch of 2013

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Consumer Discretionary Sector Funds

Shopping BagThe consumer discretionary sector of the S&P 500 has already easily outperformed the broader market this year, with a total return of 31%.

We expect that outperformance to continue. Consumers are carrying much less debt on their personal balance sheets, the housing and jobs markets are improving and auto sales are booming (witness the power of pent-up demand.) And, of course, we’ve got the holiday shopping season just around the corner.

Top Sector ETF — Vanguard Consumer Discretionary ETF (VCR): Top holdings include Comcast (CMCSA) and Home Depot (HD) and Amazon (AMZN), and the expense ratio of 0.14% can’t be beat. Sure, you could buy the equivalent mutual index fund — Vanguard Consumer Discretionary Index Fund Admiral Shares (VCDAX) — but the minimum investment is $100,000.

Top Sector Mutual Fund — Fidelity Select Consumer Discretionary Fund (FSCPX): Top holdings include Comcast and Disney (DIS), it’s crushing its benchmark for the year-to-date, and expenses of 0.84% is a bargain price for active management.

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