Should You Invest in the iShares U.S. Consumer Discretionary ETF (IYC)?

Designed to provide broad exposure to the Consumer Discretionary - Broad segment of the equity market, the iShares U.S. Consumer Discretionary ETF (IYC) is a passively managed exchange traded fund launched on 06/12/2000.

Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are excellent vehicles for long term investors.

Investor-friendly, sector ETFs provide many options to gain low risk and diversified exposure to a broad group of companies in particular sectors. Consumer Discretionary - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 12, placing it in bottom 25%.

Index Details

The fund is sponsored by Blackrock. It has amassed assets over $1.32 billion, making it one of the larger ETFs attempting to match the performance of the Consumer Discretionary - Broad segment of the equity market. IYC seeks to match the performance of the Dow Jones U.S. Consumer Services Index before fees and expenses.

The Russell 1000 Consumer Disc 40 Act 15/22.5 Daily Capped Index measures the performance of the consumer services sector of the U.S. equity market.

Costs

Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are the same.

Annual operating expenses for this ETF are 0.39%, making it one of the cheaper products in the space.

It has a 12-month trailing dividend yield of 0.52%.

Sector Exposure and Top Holdings

Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.

This ETF has heaviest allocation in the Consumer Discretionary sector--about 66.90% of the portfolio. Telecom and Consumer Staples round out the top three.

Looking at individual holdings, Amazon Com Inc (AMZN) accounts for about 14.24% of total assets, followed by Tesla Inc (TSLA) and Costco Wholesale Corp (COST).

The top 10 holdings account for about 52.10% of total assets under management.

Performance and Risk

So far this year, IYC has lost about -4.58%, and it's up approximately 15.59% in the last one year (as of 05/08/2025). During this past 52-week period, the fund has traded between $76.12 and $101.28.

The ETF has a beta of 1.20 and standard deviation of 21.95% for the trailing three-year period, making it a medium risk choice in the space. With about 180 holdings, it effectively diversifies company-specific risk.

Alternatives

IShares U.S. Consumer Discretionary ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, IYC is a reasonable option for those seeking exposure to the Consumer Discretionary ETFs area of the market. Investors might also want to consider some other ETF options in the space.

Vanguard Consumer Discretionary ETF (VCR) tracks MSCI US Investable Market Consumer Discretionary 25/50 Index and the Consumer Discretionary Select Sector SPDR ETF (XLY) tracks Consumer Discretionary Select Sector Index. Vanguard Consumer Discretionary ETF has $5.38 billion in assets, Consumer Discretionary Select Sector SPDR ETF has $19.46 billion. VCR has an expense ratio of 0.09% and XLY charges 0.08%.

Bottom Line

To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.

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This article originally published on Zacks Investment Research (zacks.com).

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