Loving Low-Beta ETFs (XLP, XLV, VTV)

"Boring is beautiful" is one of the investing adages that has a tendency to be overused, but it might be an appropriate maxim for the current market environment. Indeed, it was high-beta, riskier fare that drove equities higher through the first seven weeks of the 2012. Emerging markets, energy and select materials ETFs all had their days and weeks in the sun. That trend reverse course in March when the Materials Select Sector SPDR XLB gained just half a percent and the Energy Select Sector SPDR XLE slid 3.5%. Still, the year-to-date performance gap between "risk on" stocks and ETFs and their more boring counterparts might be enough to keep enticing investors to eschew the ETFs their grandparents would love. In other words, boring stocks may keep trailing their sexier rivals, but that's not necessarily an invitation to ignore slow movers, either. And with May, which could bring selling and going away, right around the corner, it pays to note that March's sector leaders, might retain those titles for a few more months. Take a look at the following. Consumer Staples Select Sector SPDR XLP Arguably the king of boring sector funds, the Consumer Staples Select Sector SPDR is up by a not-so-boring 3% in the past month. Philip Morris PM, XLP's third-largest holding at over 11% of the fund's weight, is helping lead the charge with a 6.1% jump over that time. A 7.1% gain by Dow component Coca-Cola KO, 12.2% of XLP's weight, is certainly helping as well. Investors desiring a little bit more risk with a staples ETF might want to look at the First Trust Consumer Staples AlphaDEX Fund FXG, though it should be noted FXG's yield and recent performance trail XLP. Health Care Select Sector SPDR XLV The Health Care Select Sector SPDR is up almost 4% in the past month and Dow component Pfizer PFE has been helping drive the ETF's bullish ways with a gain of over 5%. Further validation of the "embrace pharma" trade comes in the form of the fact that both XLV and the rival Market Vectors Pharmaceuticals ETF PPH touched new 52-week highs today. iShares Dow Jones US Healthcare Provider Index Fund IHF IHF has a beta that barely exceeds that of the S&P 500, but that nominal difference has not stopped IHF from outpacing the SPDR S&P 500 SPY by almost a full percentage point over the past month. The ETF has utility on multiple fronts beyond being a conservative way to outperform the broader market. First, IHF could be a potential should Obamacare be overturned. Second, health care providers have a strong second quarter track record. Up almost 5% in the past week, IHF has also touched a new 52-week high today. Vanguard Value ETF VTV The Vanguard Value ETF, had over $5.6 billion in assets under management at the end of February, making it one of the largest large-cap focused ETFs in the U.S. VTV was recently assailed by one pundit that put VTV on a list of the 10 worst large-cap ETFs. Long story short, that pundit implies that VTV is home to some so-called "dangerous" stocks, AT&T T being one of them. Well, VTV is home to 418 stocks and it's reasonable to expect that when an ETF tracks that many stocks, some are going to be turkeys. After all, there probably aren't 420 large-cap stocks worth owning at the moment. Indeed, AT&T has been a dud for a while now, but only accounts for 2.9% of VTV's weight. The fund is up more than 10% year-to-date and has an expense ratio of just 0.12%. Combine those factors with a conservative lineup and a beta barely above one and we've got an ETF that is ideal for a market environment that favors the boring over the bold.