The largest consumer staples ETFs hit all-time highs as data shows Americans kept spending in March

The largest consumer staples ETFs hit all-time highs as data shows Americans kept spending in March
  • The three biggest consumer staples ETFs reached record highs Thursday following March retail sales data.
  • The largest of the group is the Consumer Staples Select Sector SPDR Fund, with around $16 billion in assets.

The three largest US exchange-traded funds focused on consumer staples reached all-time highs on Thursday following data that showed a rise in retail sales last month, though there were signs of spending slowing down as inflation burned at around a 40-year high.

The consumer staples sector on the S&P 500 was the top gainer over 10 other sectors during the session before ceding the lead to the energy group.

The advances arrived after the Census Bureau said retail sales rose 0.5% in March to a record $665.7 billion, with the report gauging the health of American spending which accounts for about 70% of US economic activity. The Consumer Staples Select Sector SPDR Fund, which had around $16 billion in assets, according to ETF Database, edged up 0.6% during the session, enough to notch its highest level of $79.36.

The Vanguard Consumer Staples Index Fund ETF, which held $7 billion in assets, gained 0.5% for a record at $205.24. With more than $1 million in assets, the iShares U.S. Consumer Staples ETF picked up 0.6% and hit a record high of $210.08.

Spending at general merchandise stores posted the second-largest increase, with sales up 5.4%. Flicking at consumer discretionary spending, sales at hobby and sporting goods stores increased by 3.3% gain.


The largest increase was at gas stations, up 8.9% through the month as prices at the pump soared to near-record highs above $4 a gallon on average. Gas prices have shot higher on the back of a surge in oil prices following the invasion of Ukraine by Russia, a major oil supplier.

"Retail sales showed little damage from higher energy prices," wrote Aneta Markowska, chief economist at Jefferies, who noted spending rose 0.2% month over month excluding gasoline and supply-constrained autos.

She said there was a "clear rotation" from online retail spending to brick and mortar stores, and apparel rose by 2.6% month over month.

While consumer staples ETFs rose Thursday, some consumer discretionary ETFs pulled back. The Consumer Discretionary Select Sector SPDR Fund and the Vanguard Consumer Discretionary ETF each lost 1.2% intraday.

While retail sales rose by 0.5% last month, the year-over-year change was the lowest since February 2021, said Peter Essele, head of portfolio management for Commonwealth Financial Network, in a note.
"There's no doubt rising energy and gas prices are starting to take a toll on household budgets. March's report could be an early sign that consumers are starting to put away their wallets as prices for many goods soar across the board," he wrote.