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For investors seeking momentum, iShares U.S. Consumer Goods ETF IYK is probably on radar now. The fund just hit a 52-week high and is up roughly 14% from its 52-week low price of $110.42/share.
But are more gains in store for this ETF? Let’s take a quick look at the fund and the near-term outlook on it to get a better idea on where it might be headed:
IYK in Focus
This ETF targets domestic consumer goods stocks. The fund has a large-cap focus with the key holding being food beverage tobacco, which accounts for about half of the portfolio. Household & personal products, consumer durables, and autos & components round off the next three spots with a double-digit exposure each. The ETF charges investors 44 bps a year in fees (see: all the Consumer Staples ETFs here).
Why the Move?
The consumer staples sector has been an area to watch lately given the uncertainty arising from the attempt of Senate Republicans to reconcile their version of a tax-cut bill with that of the House of Representatives. Against such a backdrop, consumer staples acts a defensive sector. Also, it is one of the beneficiaries of a rising rate environment. Additionally, stepped-up economic activities, a recovering housing market, and a solid labor market are making the consumer segment a great place to stay invested in.
More Gains Ahead?
Currently, IYK has a Zacks ETF Rank #4 (Sell) with a Medium risk outlook, suggesting that outperformance could stall in the months ahead. However, many of the segments that make up this ETF have a strong Zacks Industry Rank, so there is definitely some promise for those who want to ride this surging ETF a little further.
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ISHARS-US CN NC (IYK): ETF Research Reports
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