Looking at the data, U.S. consumer spending was unchanged for July, while consumer confidence rose unexpectedly. To add another layer of complexity, personal income ticked higher in July.

So, Americans didnt spend the extra money they earned even as they grew more confident about the state of economy.

But whatever consumers say or do, investors are betting on the consumer sector. It has outperformed broad U.S. equities year-to-date, and flows to ETFs canvassing the sector have exceeded $600 million for 2012.

But picking the right ETF is anything but easy, as well see.

Just look at the year-to-date performance spread of the top four funds by assets.

The top-performing fund shown in dark blue, the iShares Dow Jones U.S. Consumer Services Index Fund (IYC) has outpaced the laggard shown in light blue, the First Trust Consumer Discretionary AlphaDex Fund (FXD) by more than 10 percentage points in just seven months.

Also note the performance of these four funds relative to the S'P 500, shown in red, as represented by the SPDR S'P 500 (SPY). Three of the four have beaten SPY so far this year quite handily, while FXD lagged.

This means that choosing among the top ETFs in the space is just as critical as the decision to overweight or underweight the sector in the first place.

Performance Drivers

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Consumer Sector ETFs: Buyer Beware