Copyright Benzinga
While headlines are dominated by AI megatrends and tech megacaps, not all market opportunities in the current environment are pegged to artificial intelligence. Analysts at Bank of America recently highlighted a set of overlooked companies, from premium travel experiences to discount-focused retail and resilient food producers, that together paint a broader economic story. For ETF investors, these trends suggest that focusing solely on AI-themed funds could mean missing steady winners elsewhere. The U.S. economy increasingly resembles a K-shape, where some sectors thrive while others lag. This divergence is creating opportunities for ETFs that capture both ends of the spectrum — high-end discretionary spending and value-conscious consumer behavior. Premium Consumer ETFs Take Viking Holdings Ltd (NYSE:VIK), one of the companies pointed out as a good pick by BofA, for example. The company’s differentiated, all-inclusive travel offerings keep outperforming peers on superior margins and growth. ETFs capturing high-end discretionary trends include Consumer Discretionary ETFs such as the Consumer Discretionary Select Sector SPDR Fund (NYSE:XLY) and the Invesco Leisure and Entertainment ETF (NYSE:PEJ), which hold exposure to brands in luxury travel, leisure, and premium retail. Investors looking to tap into the top arm of the K-shaped recovery may find these ETFs attractive for growth even when other sectors are not performing well. XLY saw inflows of $306.08 million over the past month, according to data compiled by VettaFi. Also Read: 4 Stocks To Consider Buying As Luxury Spending Keeps Rising Discount And Value-Oriented ETFs Winners on the other side of that K would be companies like Dollar General Corp (NYSE:DG), another of BofA’s picks, as consumers trade down amid continued inflationary pressures. More and more consumers go to discount stores for essential items, while e-commerce offerings, especially same-day delivery, driving additional growth. ETFs that reflect this trend include retail ETFs like VanEck Retail ETF (NASDAQ:RTH) and State Street PDR S&P Retail ETF (NYSE:XRT) and consumer staples ETFs like Consumer Staples Select Sector SPDR Fund (NYSE:XLP) and Vanguard Consumer Staples Index Fund ETF (NYSE:VDC), which capture steady-demand products resilient to economic swings. Investor Takeaway A balanced ETF strategy that captures both premium and value-oriented sectors lets investors hedge against market volatility while participating in diverse consumer trends. Rather than focusing entirely on AI growth ETFs, funds representing the K-shaped recovery offer a broader, perhaps more stable route to returns. The bottom line is that while AI ETFs are making headlines, it’s these under-the-radar sectors, from luxury cruises to discount retail aisles, that are quietly delivering the goods. Investors can use ETFs to access both sides of the economic spectrum, ensuring their portfolios aren’t missing the complete story. Read Next: As COP30 Talks Climate, Investors Are Acting On It — Through These ETFs Photo: Shutterstock
