XLY holds the consumer discretionary sector of the S&P 500, which includes e-commerce, automobiles, restaurants, apparel, home improvement and homebuilding. Amazon and Tesla are the two largest holdings and together make up a large share of the fund, so XLY is more concentrated than a typical sector fund. Consumer discretionary is among the most economically sensitive sectors: spending on cars, travel, dining and clothing tends to rise when employment and consumer confidence are strong and to be postponed when uncertainty increases. Amazon also gives the fund indirect exposure to cloud computing through AWS, which is not purely a consumer business. Performance depends on the fundamentals of Amazon and Tesla as well as on broad consumer spending trends.
