This morning in our ETF/Index options recap we mention activity in infrequently traded XRT (SPDR S&P Retail, Expense Ratio 0.35%) options, consisting of September 94 put buyers late last week.
As with a number of indices on Friday, XRT breached its 200 day moving average and traded as low as $95.85 on an intraday basis before recovering more than 1% this morning in early trading and back to a $97 handle.
These 94 strike puts are approximately 3% out-of-the-money at current levels and we do not see options players engage in XRT on a regular basis, but when they do it is worth noting since the fund is largest U.S. Retail Equity based fund in the U.S. listed landscape with more than $1 billion in assets under management.
Year to date XRT has struggled mightily in terms of asset flows, seeing more than $493 million vacate the fund via redemptions, but it still maintains its sizable lead over the next largest fund in the category RTH (Market Vectors Retail, Expense Ratio 0.35%, $223 million in AUM).
XRT, as we have mentioned in the past, takes a modified equal weighted approach to the U.S. Retail sector, giving it roughly even exposure on its top end to companies such as AMZN (1.26% weighting, #1), NFLX (1.22% weighting, #2), and NTRI (1.21% weighting, #3). RTH on the other hand notably favors Mega and Large Cap companies, with 92% of the portfolio residing across those caps, with the largest weightings in the underlying index to AMZN (12.68%), HD (8.25%), and WMT (8.17%).