XLP: A Well-Built Fund That Should Outperform In The Current Economy

Summary

• Simple investment strategies can be effective, particularly in the consumer staples sector, which has performed well over the past three years.
• The Consumer Staples Select Sector SPDR® Fund ETF (XLP) is a well-built fund focusing on conservative retail companies, offering solid diversity and strong core holdings.
• XLP has delivered total returns of 60.02% over the last 5 years, compared to the S&P 500's 103.3% in the same period.
• I am initiating coverage of XLP with a buy rating due to its strong cash flow, impressive balance sheets, and favorable positioning in the current economic environment.

Luis Alvarez

There are times when overthinking financial choices doesn't produce the best results. While being a contrarian often produces good results, simple also works well at times.

Some of the best-performing retail companies in the market over the last 3 years

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.