The Wal-Mart supplier exchange traded fund (ETF) FocusShares ISE Revere Wal-Mart Supplier Index Fund (WSI) is in a category of its own. Roger Nusbaum for TheStreet.com reports that the 30-stock ETF is most heavily-weighted toward consumer staples at 48%, followed by consumer discretionary at 20% and technology stocks at 17%. The S&P Retail Index is used as the benchmark, but Nusbaum suggests it would be more suited to compare to a consumer staples index or the Consumer Staples Sector SPDR (XLP).
The striking factor is the relationship between Wal-Mart and its suppliers. It tends to be testy and the over-reliance on one type of customer could be more of a reason to sell the stock than to buy it. We’ll just need to watch for now.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.