Wal-Mart (WMT) seems to so far be benefiting from the tough economy, so how is the Wal-Mart supplier exchange traded fund (ETF) doing?

Yesterday’s retail report, which delivered the weakest numbers in 13 years, did have good news for discount retailers. Both Wal-Mart and Costco (COST) reported higher sales compared to those of the previous March.

Richard Widows for The Street says an interesting fund opportunity exists for believers that could provide a refuge during uncertain economic times.

FocusShares ISE-Revere Wal-Mart Supplier Index ETF (WSI) tracks an index of Wal-Mart suppliers that derive a significant portion of their revenue from the store. It’s got a number of very eclectic holdings, including  Mattel (MAT), General Mills (GIS) and Clorox (CLX). Kellogg (K) is the top holding, with 6.3% of assets.

Bear in mind that the retail giant has a tendency to squeeze every possible percentage point from its suppliers’ margins. It’s up to the investor to ascertain whether the possibility of maintenance of sales volume by suppliers is worth the risk that Wal-Mart could squeeze profits.

Wal-Mart and Costco are components of other ETFs:

• Retail HOLDRs (RTH): Costco, 5.5%; Wal-Mart, 19.8%
• SPDR S&P Retail (XRT): Wal-Mart, 2%

For full disclosure, some of Tom Lydon’s clients own shares of RTH.

Tags: Retail, XRT